Prelims final copy - Centre for the Study of Co-operatives

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Prelims final copy - Centre for the Study of Co-operatives

The Social and Economic Importance

of the Co-operative Sector

in Saskatchewan

Research Report Prepared for

Saskatchewan Department of Economic and Co-operative Development

L OU H AMMOND K ETILSON

M ICHAEL G ERTLER

M URRAY F ULTON

R OY D OBSON

L ESLIE P OLSOM

C ENTRE FOR THE S TUDY OF C O-OPERATIVES

U NIVERSITY OF S ASKATCHEWAN

S ASKATOON

M AY 1998


The Social and Economic Importance

of the Co-operative Sector

in Saskatchewan


The Social and Economic Importance

of the Co-operative Sector

in Saskatchewan

Research Report Prepared for

Saskatchewan Department of Economic and Co-operative Development

L OU H AMMOND K ETILSON

M ICHAEL G ERTLER

M URRAY F ULTON

R OY D OBSON

L ESLIE P OLSOM

C ENTRE FOR THE S TUDY OF C O-OPERATIVES

U NIVERSITY OF S ASKATCHEWAN

S ASKATOON

M AY 1998


Copyright © 1998 Centre for the Study of Co-operatives, University of Saskatchewan;

and Saskatchewan Department of Economic and Co-operative Development

All rights reserved. No part of this publication may be reproduced in any form

or by any means without the prior written permission of the publisher. In the case

of photocopying or other forms of reproduction, please request permission in writing

from the Centre at the address below.

Editing, cover and interior design, and layout by Nora Russell

Cover image: The Rainbow Flag, the international emblem of co-operatives. Adopted

as the official co-operative symbol by leaders in the International Co-operative Alliance

in 1925, the flag includes the colours of all the flags of the world. Each colour contributes

to the whole and symbolizes harmony and the universal oneness of all people.

CANADIAN CATALOGUING IN PUBLICATION DATA

Main entry under title:

The social and economic importance of the co-operative

sector in Saskatchewan

Report prepared for Saskatchewan Economic and

Co-operative Development.

Includes bibliographical references.

ISBN 0–88880–377–X

1. Cooperative societies—Saskatchewan. 2. Cooperation

—Saskatchewan. I. Ketilson, Lou Hammond.

II. University of Saskatchewan. Centre for the Study

of Co-operatives. III. Saskatchewan. Saskatchewan

Economic and Co-operative Development.

HD3450.A3S38 1998 334’.097124 C98–920100–7

CENTRE FOR THE STUDY OF CO-OPERATIVES

ROOM 196, 101 DIEFENBAKER PLACE

UNIVERSITY OF SASKATCHEWAN

SASKATOON SK S7N 5B8

PHONE: (306) 966–8509

FAX: (306) 966–8517

E-MAIL: COOP.STUDIES@SASK.USASK.CA

WEBSITE: HTTP://WWW.COOP_STUDIES.USASK.CA OR

HTTP://DIEF106001.USASK.CA


Executive Summary

Introduction

Throughout the twentieth century, co-operatives have played an integral role in the social

and economic development of Saskatchewan. Initial forms of co-operation have evolved

into an extensive network of co-operatives involved in a wide range of activities: agriculture and

resources, community development, recreation, child care and education, wholesale and retail,

financial, community service, and other types of co-operation.

The impact of co-operatives on communities is substantial, especially in the smaller centres,

where they ensure competitive prices and supply a wide range of services. Co-operatives also

play an important role at the provincial and sectoral level. In 1996, 1,560 co-operatives generated

revenues of $6.9 billion, held assets of $9.19 billion, and produced a surplus of $245.6 million.

Capital investment by the co-operative sector totalled $124 million. Co-operatives employed

14,400 people and paid wages of $424 million. Table 1 (page ix) provides a summary, by sector,

of the economic impact of co-operatives in Saskatchewan.

Conclusions and Recommendations

1. Co-operatives Promote Local Pride and Social Integration,

Local Control and Local Reinvestment

Co-operatives add an important organizational diversity to the mix of enterprises in the province.

Their presence promotes stability and allows Saskatchewan residents to respond innovatively to

many kinds of opportunities and needs. Co-operatives have a long track record in the province

and appear to be engaged in organizational renewal that will allow them to continue to make

crucial contributions to sustainable economic development well into the next millennium.

The co-operative model should be promoted as a financially viable institutional form

for providing goods and services to a group or a community, especially when this

provision requires knowledge of the local economy and/or is sensitive to profitability.

Statistical profiles of co-operative contributions to the economy are critical for promoting

and developing the sector.

Government should continue to work with the co-operative sector to collect financial

information from all provincial co-operatives for storage in an electronic database.

U NIVERSITY OF S ASKATCHEWAN • V


• E XECUTIVE S UMMARY

2. Co-operatives Behave Differently

Co-operatives behave differently from other institutions in terms of pricing, commitment to

community rather than individual interests, ability to provide certain kinds of goods and services,

and ability to keep a greater portion of the value generated within the local economy in the community.

This is especially true in smaller and more geographically isolated communities.

The co-operative model needs to be promoted for use as a community development

strategy. Co-operative leaders should continue to undertake educational activities to

demonstrate the effectiveness of the co-operative approach.

3. Co-operatives Stabilize and Contribute to Growth in Communities

Co-operatives allow people to see the repercussions of their individual actions on the community.

Collective ownership of a business gives co-operative members the opportunity to observe the

effect of by-passing their local market, and an opportunity to benefit from a deliberate choice to

patronize the local establishment.

Co-operatives have generally had a stabilizing effect in the regional economy, contributing

to a positive environment that promotes long-term individual, community, private-, and publicsector

investment. Their stabilizing role is particularly evident in more vulnerable localities and

among less-advantaged participants. There is a strong commitment to rural Saskatchewan, where

co-operatives provide credit, services, and attractive terms even to small-volume or more risky

customers or clients.

Globalization presents risks, challenges, and options for Saskatchewan communities. Cooperatives

provide opportunities to participate in global exchange without sacrificing local control.

In addition, there is growing worldwide interest in co-operative organizations as vehicles

for economic and social development. The vibrant co-operative sector in Saskatchewan opens

opportunities for international exchanges, trade, and collaboration.

Co-operatives must be encouraged to continue with community development initiatives

by supporting member and leader education and training programs. These

programs should provide co-operatives and communities with a better understanding

of what community development involves, and what co-ops and other organizations

can do to facilitate it.

Support must be provided for the start up of new co-operative enterprises and the

development of new co-operative forms. Co-operatives work best in a context where

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E XECUTIVE S UMMARY •

there is a multiplicity of co-operative firms, operating in multiple sectors, and where

people attend to the preservation of co-operative identity and co-operative principles.

The role of co-operatives in sustainable development needs to be documented, and expertise

should be developed in their potential as vehicles for sustainable development.

Co-operatives as organizations that facilitate global linkage, exchange, and cooperation

must be recognized and developed.

Finally, national and international linkages for trade, mutual assistance, and personnel

exchange should be further developed; and partnerships with international

agencies and co-operative organizations for mutual learning need to be fostered.

4. Co-operatives Stabilize and Contribute to Growth in Regional Economies

Significant changes are occurring in the spatial organization of co-operative activities. Given their

strong roots in local places, co-operatives have compelling reasons to participate in and promote

new arrangements for providing quality services in communities of various sizes—including

smaller or more remote rural centres.

Co-operatives are well integrated into the province’s economy, and into communities at many

levels. Their links to other co-operatives and other organizations or agencies provide information

and resources to support and enrich what is available locally.

Co-operatives have important roles strengthening linkages within and among communities

and sectors. Co-operatives continue to be important sites of social innovation, and key partners

for multi-sectoral collaboration.

Develop partnerships among co-operatives, communities, and agencies to achieve regional

development objectives. Augment mutually advantageous rural-urban linkages

through co-operatives. Increase involvement in REDAs to ensure that the co-operative

model is considered when new services are developed. Evaluate alternatives for the reorganization

and relocation of co-operatives in the context of collaborative, strategic,

regional planning.

Institute a regional co-operative development council and/or a co-operative development

foundation to support new community and co-operative initiatives; federal,

provincial and regional agencies to partner with co-operatives and help fund rural

co-operative development.

Recognize the co-operative advantage in promoting partnerships and collaboration;

document co-operative support for community and voluntary organizations.

U NIVERSITY OF S ASKATCHEWAN • VII


• E XECUTIVE S UMMARY

5. Co-operatives Have a Strong Impact on Both the Current Leadership

in Rural Communities and the Development of New Leaders

Collaborative models, both formal and informal, are increasingly being used to strengthen co-ops

by leveraging limited resources, and to provide services in vulnerable communities. To be successful

in collaborative ventures, leaders require the ability to develop relationships with diverse stakeholders.

Co-operatives can build on their strengths in this area by welcoming greater diversity into

their leadership ranks. Through the support of education and training initiatives, co-operatives

can increase their involvement in building the capacity of their members and employees to take

on leadership roles in the community.

Expand the knowledge of various collaborative models in use through research and

sharing of best practices. Such knowledge has to be linked to leadership training

programs, where collaborative skills are emphasized.

Support further educational experience in co-operation and community economic

development for interested personnel. Promote exchanges, visits, networking, and

collaborative projects.

Build employee loyalty and demonstrate broader concern for human development

by showing leadership in the implementation of progressive labour relations.

Co-operatives should strive to be seen as highly desirable places to work given the

whole package of conditions, benefits, and opportunities that they can provide.

6. Diversity Is Important

There is an ongoing need to find ways to make co-operative board and staff positions accessible

and attractive to under-represented groups, including women, young people, new immigrants,

and aboriginal persons. Some co-operatives can boast important advances in this regard, providing

examples and inspiration for co-operatives and other organizations that have made slower progress

on these agendas.

Co-operatives should emulate effective practices: develop appropriate services and capacities;

pursue equity goals in employment, appoint aboriginal liaison committees,

and seek partnerships with aboriginal bands, councils, and development authorities.

Consider methods adopted by co-operatives elsewhere such as Gender Sensitivity

Training (GST); a focus on Gender and Development (GAD) issues; and mentoring

of female managers, staff, and directors. Continue to support the “Women and Cooperatives

Forum” on a regional basis.

VIII • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


Table 1: Summary of the co-operative sector, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

Agricultural 408 93,348 72,209 3,071 329 124,124 4,302,615 52,176 80,011 1,334,647 828,015 318,877 0.39

Community develop. 165 1,807 1,807 2 67 158 527 (35) 0 4,258 3,180 1,076 0.77

Recreational 219 21,427 20,805 129 214 5,264 28,229 1,523 5,453 42,058 12,924 29,134 0.06

Child care and educ. 133 9,273 8,895 302 217 7,075 10,205 284 542 5,243 1,365 3,881 0.13

Retail and wholesale 192 336,415 283,415 6,108 5 129,809 1,797,136 140,558 22,030 753,415 212,082 541,334 0.16

Financial 345 620,167 569,849 3,518 85 147,174 741,386 50,742 15,528 6,993,383 6,477,054 491,330 0.94

Community service 47 30,582 30,582 201 90 9,412 14,618 368 469 6,101 1,786 4,316 0.13

Other 51 2,559 2,559 44 46 826 8,887 -4 235 54,169 49,922 4,247 0.56

Total/average 1,560 1,115,578 990,121 13,375 1,053 423,844 6,903,601 245,613 124,268 9,193,276 7,586,328 1,394,194 0.46

* Debt/Asset figures do not include extreme values

Source: See tables in “Sectoral Analysis.”

Nonfinancial 0.31


Contents

Executive Summary

v

Social and Economic Importance of

the Co-operative Sector in Saskatchewan 1

Introduction 1

Co-operatives and Communities 3

Community Overview 3

Analysis 6

Building Physical Infrastructure 6

Building Social Infrastructure 11

Building Personal Infrastructure 13

Conclusions and Recommendations 16

Co-operatives Behave Differently 17

The Stabilizing Effect of Co-operatives 18

Providing Leadership 21

Conceptualizing the Social and Economic Impact

of Co-operatives 26

Conceptualizing Social and Economic Impacts 26

Building and Sustaining Communities 28

Co-operative Principles 31

Co-operatives and the Changing Structure of Communities 32

Networks: A Conceptual Model 34

Conclusions 37

References 38

U NIVERSITY OF S ASKATCHEWAN • XI


• C ONTENTS

Sectoral Analysis 39

The Co-operative Sector in Saskatchewan 39

Agricultural and Resource Co-operatives 44

Farming 46

Feeder 46

Grazing 48

Breeding 49

Seed Cleaning 50

Farmers’ Markets 50

Soil Conservation 51

Fishing 52

Saskatchewan Wheat Pool 52

Saskatchewan Dairy Producers 54

Other Agricultural Co-operatives 56

Community Development Co-operatives 56

Small Business Loans Associations 57

Rural Development Corporations 60

Recreational Co-operatives 61

Community Halls 62

Curling and Recreational Centres 63

Television 64

Other Recreation 64

Child-Care and Preschool Co-operatives 65

Child-Care Centres 66

Preschools 67

Retail and Wholesale Co-operatives 69

Federated Co-operatives Limited and Affiliated Retails 69

Other Retail Co-operatives 72

Financial Co-operatives 73

The Credit Union System and Credit Union Central 73

Co-operative Trust Company of Canada 76

The Co-operators 76

Co-operative Hail Insurance 77

Community Service Co-operatives 78

Health Care 79

Fire Protection 79

Funerals 81

Water Systems 81

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C ONTENTS


Adult Education 81

Other Community Services 82

Other Types of Co-operatives 82

Housing 82

Real Estate Development 83

Employment 84

Publishing 84

Miscellaneous 85

Francophone Co-operatives 85

Comparative Tables 86

Research Approach and Procedures 105

Fiscal Year 106

Information Sources 106

The Effect of Inflation 106

Active versus Inactive Members 106

Full-Time versus Part-Time Employees 107

Members’ Equity versus Net Worth 107

Debt/Asset Ratios 107

Employment and Total Wage Bill 108

Capital Investment 108

Endnotes 109

Community Profiles 111

Southwest Area of the Grainbelt 111

Competitive Goods and Services 112

Provision of Goods and Services Not Otherwise Provided 114

Strengthening the Regional Economy 114

Building and Sustaining Community 115

Networking and Diversity 116

Community versus Self-Interest 118

Local Control 118

Management and Leadership 119

Westcentral Area of the Grainbelt 121

Competitive Goods and Services 122

Provision of Goods and Services Not Otherwise Provided 124

Strengthening the Regional Economy 125

Networking and Diversity 127

Community versus Self-Interest 130

U NIVERSITY OF S ASKATCHEWAN • XIII


• C ONTENTS

Local Control 131

Management and Leadership 133

Northeast Area of the Grainbelt 135

Competitive Goods and Services 137

Provision of Goods and Services Not Otherwise Provided 138

Strengthening the Regional Economy 139

Networking and Diversity 140

Community versus Self-Interest 143

Local Control 144

Management and Leadership 145

Northcentral Parkland Area 147

Competitive Goods and Services 147

Provision of Goods and Services Not Otherwise Provided 148

Strengthening the Regional Economy 151

Building and Sustaining Community 153

Networking and Diversity 155

Local Control 156

Management and Leadership 157

Leadership Development Survey 158

Introduction 158

Demographics 159

Formal Leadership 160

Influence of Co-operative Involvement and Education 164

Influence of Parental Involvement in Co-operatives and Community 168

Leadership Skills 172

Informal Leadership 175

Influence of Co-operative Involvement and Education 175

Influence of Parental Involvement in Co-operatives and Community 175

Diversity 178

Women’s Representation in the Leadership of Co-operatives 178

Summary 179

Conclusions 181

Endnotes 182

Appendix A: Functional Groupings of Communities 183

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C ONTENTS


Appendix B: A Review of Concepts and Literature 185

Introduction 185

Economic Components 187

Competitive Goods and Services 187

Provision of Goods and Services Not Otherwise Provided 189

Social Infrastructure and Social Capital 192

The Social Role of Co-operatives 195

Community versus Self-Interest 197

Additional Economic Activity 198

The Impact of Management on Co-operative Behaviour 199

Local Control over Decision Making 200

Co-operatives and Community Leadership 202

Endnotes 206

Appendix C: People Interviewed 211

Appendix D: Telephone Survey Methodology 214

Purpose of the Study 214

Research Approach and Procedures 214

Construction of the Questionnaire 214

Sampling Profile 215

Limitations of the Telephone Survey Methodology 216

Overview of Results 217

Appendix E: Questions for Use

with Community Interviews 224

U NIVERSITY OF S ASKATCHEWAN • XV


Acknowledgements

We gratefully acknowledge the financial support of the Saskatchewan Department

of Economic and Co-operative Development and the Canadian Co-operative Association,

Saskatchewan Region Council. Particular thanks go to Tom Marwick, who breathed life

into the project at its inception, providing advice and encouragement, and nurturing a

more holistic appreciation of co-operatives and co-operation. It was his conception that

this study should expand on our earlier work to include much more on the social as well

as the economic importance of co-operatives in Saskatchewan.

This project would not have been possible without the co-operation of many participants,

especially the people in four regions and many co-operatives who agreed to be interviewed

for the community profiles. Nora Russell provided editorial and organizational expertise

at all stages and was responsible for the production of the final report, including overall

design and layout. Centre staff Marianne Taillon and Karen Neufeldt provided tireless

logistical support. Researcher Julie Van Vliet assisted with the fieldwork in one of the

regions. Rochelle Smith monitored our progress at the Co-operatives Directorate during

the initial stages of the report; she was succeeded by Wayne Thrasher when she left to

join us at the Centre as our first interdisciplinary PhD student.


Social and Economic Importance

of the Co-operative Sector

in Saskatchewan

Introduction

Throughout the twentieth century, co-operatives have played an integral role in

the social and economic development of Saskatchewan. The formation of the first

co-operative enterprises at the turn of the century grew out of the struggle of rural people

to gain control over their local economies. They turned to co-operative activity as a means

of marketing their agricultural produce and obtaining needed goods and services. The following

quotation from 1941 is just as applicable if quoted today, revealing the continued

positive impact of co-operatives on the province.

Saskatchewan provides to the rest of Canada stimulation and encouragement for

co-operative action. It is probable that in no province or state on this continent

with a population of approximately one million has the Movement made so much

and such varied progress as in that prairie province. (Arnason 1941)

These initial forms of co-operation have evolved into an extensive network of cooperatives.

Similar to the findings of the 1991 study (Fulton et al.), co-operatives in

Saskatchewan continue to be involved in a wide range of activities: agriculture and

resources, community development, recreation, child care and education, wholesale and

retail, financial, community service, and other types of co-operation. Total revenue earned

U NIVERSITY OF S ASKATCHEWAN • 1


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

by co-operatives in 1996 was $6.9 billion, almost double that reported in 1989 (Fulton et al.

1991). Together, co-operatives controlled more than $9.19 billion in assets in 1996, with

capital investment totalling $124 million.

Saskatchewan’s two largest businesses are co-operatives, as are four of the province’s

top twenty firms (Saskatchewan Business, September/October 1997, p29). Co-operative enterprises

in Saskatchewan vary widely in terms of their size and scope. Large organizations,

such as the Saskatchewan Wheat Pool, Credit Union Central, and Federated Co-operatives

Limited, wield significant economic power in the provincial economy. Although

smaller co-operatives may seem relatively insignificant in monetary terms, they are often

major players at the community level. Two of the largest—FCL and CUC—exist primarily

to serve the needs of a network of smaller retail and financial services co-operatives.

Total revenue earned by co-operatives

in 1996 was $6.9 billion, almost double

that reported in 1989. Together, cooperatives

controlled more than $9.19

billion in assets in 1996, with capital

investment totalling $124 million.

As one of the few remaining businesses in many small

centres, a co-operative provides essential employment and

services to residents and has a significant impact on the

survival of rural communities. Distributed throughout the

province in communities of every size, the smaller co-operatives

provide important local economic activity. And despite

a marginal decline in the number of people employed by co-operatives between 1989 and

1996, it must be emphasized that co-operatives provide employment and thus stability in

the most vulnerable of communities. In addition, co-operatives have made, and continue

to make, important social contributions to the communities in which they are located.

The diversity and success of co-operatives suggest they possess characteristics that

have enabled them to address needs experienced by their members and by communities

in which the members live. Given the major social and economic changes that have continued

to affect the province in the 1990s, it is appropriate to once more examine the role

that co-operatives play in rural and urban communities. This is the subject of the first part

of the report. The second part analyses the economic importance of co-operatives on a

sectoral level, as well as for the provincial economy overall. The third part presents the

results of a leadership study in the province.

2 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S OCIAL AND E CONOMIC I MPACT A NALYSIS •

Co-operatives and Communities

Recent research (e.g., Flora and Flora 1993) has identified three components critical to

the development and maintenance of dynamic and vibrant communities. The first two,

which are relatively well known, are: 1) the physical infrastructure—the development of

railroads, telecommunications, roads, postal services, etc.; and 2) the personal infrastructure—the

development of individual leadership within the community. The third component—the

“social infrastructure”—has been given less attention by researchers, but it

is nevertheless the key ingredient that ties together the physical and the human, allowing

the community to grow and develop.

This section examines the role that co-operatives play in Saskatchewan communities.

The theoretical base of the analysis is the conceptual model of co-operatives and their

impact on communities developed through past research at the Centre for the Study of

Co-operatives (see Appendix B). This study contributes a more thorough examination of

the role of co-operatives in strengthening social infrastructure. And in recognition of its

significance, the current work considers an additional element not examined in the 1991

study—the role of co-operatives in supporting leadership development.

The analysis in this section is based on interviews with community and co-operative

leaders in eleven different centres in the province, clustered in four distinct geographical

regions—the southwest, westcentral, and northeast parts of the grainbelt, and the northcentral

parkland. These areas were chosen to provide a broad overview of the southern

half of the province and to obtain samples that reflected different climatic conditions, resource

bases, and population mix. The responses to these interviews have been organized

by geographical region and are presented in the section titled “Community Profiles.”

Community Overview

As in the 1991 study, communities were grouped into the six functional categories identified

by Stabler and Olfert: Minimum Convenience; Full Convenience; Partial Shopping;

Complete Shopping; Secondary Wholesale-Retail; and Primary Wholesale-Retail (see

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Appendix A). Communities were grouped together and assigned to a category based on

similarities in population, number of businesses, and numbers and types of services. Table

1 presents the number of communities in each of the categories at four points in time between

1961 and 1995.

Table 1: Functional classification of Saskatchewan communities: 1961, 1981, 1990, and 1995

Functional

Year

Category 1961 1981 1990 1995

Minimum Convenience 271 400 419 500

Full Convenience 189 136 117 59

Partial Shopping 99 30 46 22

Complete Shopping 29 22 6 6

Secondary Wholesale-Retail 8 8 8 8

Primary Wholesale-Retail 2 2 2 2

Source: Stabler and Olfert 1996.

Co-operatives are found in communities representing all six functional categories.

As was found in the previous study, co-operatives are concentrated in the communities

providing minimal services. Figure 1 indicates that 66 percent of retail co-operatives and

52 percent of credit unions in Saskatchewan are located in the Minimum Convenience

category, with a further 17 and 16 percent of retail co-ops and credit unions, respectively,

located in Full Convenience centres. Since the previous study, the rate of community

decline from Full Convenience to Minimum Convenience has accelerated, increasing the

importance of co-operatives in providing service to communities in the lower categories.

Table 2 shows the average number of businesses of selected types found in each of the

functional categories. At the Minimum Convenience level, for instance, approximately

one community in three has a general store, while just under one community in two has

a grocery store. Since retail co-operatives are located in 66 percent of the Minimum Convenience

and 17 percent of Full Convenience centres, it is clear that co-operatives play a

major role in providing services to this level of community.

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S OCIAL AND E CONOMIC I MPACT A NALYSIS •

Communities Retail Credit Unions

0.90

0.80

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.00

Minimum

Convenience

Full

Convenience

Partial

Shopping

Complete

Shopping

Secondary

Wholesale-

Retail

Primary

Wholesale-

Retail

Functional Category

Figure 1: The relative share of retail co-operatives and credit unions in communities classified by

functional category, 1996

Table 2: Average number of businesses of selected types in community functional categories, 1996

500 59 22 7 8 2

Minimum Full Partial Complete Secondary Primary

Business

Convenience Convenience Shopping Shopping Wholesale- Wholesale-

Retail Retail

General store 0.29 0.90 1.05 1.86 3.13 12.00

Grocery store 0.39 1.59 3.23 3.71 11.00 40.50

Gas station 0.37 1.34 2.64 4.86 13.00 62.50

Restaurant 0.32 1.64 4.27 8.86 23.88 185.50

Hotel 0.39 1.05 2.64 4.29 7.50 22.00

Auto repair 0.25 1.24 2.23 4.71 14.63 105.00

Bank/CU 0.50 1.73 2.86 4.43 7.50 62.00

Farm equipment 0.22 1.10 2.55 2.86 6.25 24.50

Bulk fuel 0.30 1.29 1.86 2.43 4.25 10.00

Build. material 0.18 1.39 2.23 4.57 8.38 39.00

Source: Stabler and Olfert 1996.

U NIVERSITY OF S ASKATCHEWAN • 5


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Analysis

Building Physical Infrastructure

As outlined in Table 1, the functional hierarchy of Saskatchewan communities has been

evolving over the past thirty-four years. Between 1961 and 1981, a substantial downward

movement occurred in the Partial Shopping and Full Convenience levels, while the top

three categories remained relatively stable. The increasing number of communities in

the lower categories reflected the fact that the smaller communities in the province were

losing economic activity as businesses closed or relocated, and people increasingly shopped

in larger centres. It also reflected a shift of population out of rural areas, reducing the

number of activities the community could sustain.

And although it occurred at a slower rate,

As noted in the 1991 study, the co-operative was

often the only business in towns at the Minimum

Convenience level. Despite this, the co-operatives

were able to provide goods and services at competitive

prices as well as goods and services that

would otherwise not have been provided.

there was a further downward movement in the

Full Convenience category between 1981 and

1990. The largest change, however, came in the

communities that were in the Complete Shopping

Centre category in 1981. Of the twenty-two communities

in 1981, only six remained in 1990. Since

1990, the lower three categories have again experienced substantial change, with 50 percent

of the Partial Shopping Centres and 70 percent of the Full Convenience Centres moving

to a lower classification by 1995.

A strong relationship exists between the functions performed by a community and the

role played by a co-operative in that community. To understand this relationship, we

analysed interview responses from the community clusters, with the communities grouped

by function.

As noted in the 1991 study, the co-operative was often the only business in towns at

the Minimum Convenience level. Despite this, the co-operatives were able to provide

goods and services at competitive prices as well as goods and services that would otherwise

not have been provided.

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S OCIAL AND E CONOMIC I MPACT A NALYSIS •

By relying on a daily bus schedule, the ability of Federated Co-operatives Limited

(FCL) to wholesale a wide range of items, and the ability to order wholesale from other

suppliers, local co-operatives are able to operate what one group referred to as a “just-intime”

inventory system that sometimes even delivers larger goods to people’s farms.

Equally important were co-operative and community-owned curling rinks, bowling

alleys, and recreational centres. For many of the respondents, these services were vital to

the preservation of the community. Without community involvement, many of these services

would not be provided, since the town would not have the tax base to provide them.

However, even the ability of co-operatives and other community-based groups to provide

these services is under stress as population in the more remote areas continues to decline.

As one moves up the functional categories to the Full Convenience and Partial

Shopping Centres, many of the same observations continue to hold. The retail co-operative

and credit union are viewed as important in ensuring competitive pricing and the

continued provision of goods and services:

We have just opened a branch in [adjacent community]. When the Royal Bank

left town, the community wanted a financial institution. They approached some

of the other banks, but only the credit union agreed.

Despite initiatives to keep customers shopping locally, people still routinely drive to

larger centres for goods and services. While co-operatives are essential for stabilizing the

community, filling in holes where service is lacking, they

are also expected to restrict their services so other firms

can remain in business. This creates a dilemma for managers

and boards when it comes to making decisions

about the deletion or addition of services. Residents feel

that the presence of the co-operatives strengthens their

community, but are concerned at the same time that they not undercut other similar businesses.

As one manager indicated, “The board of directors has said be aggressive, but don’t

hurt any of the other businesses.”

Tough economic times and the pullout of

chartered banks and some of the chain

department and hardware stores often

leave the co-operatives in these communities

as the primary provider of services.

Tough economic times and the pullout of chartered banks and some of the chain

U NIVERSITY OF S ASKATCHEWAN • 7


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

department and hardware stores often leave the co-operatives in these communities as

the primary provider of services. At the same time, intense competition among the remaining

businesses has challenged the co-operatives and credit unions to be current and

innovative. And while the number of co-operatives may have declined marginally in some

sectors, the number of communities served has remained relatively stable through amalgamations

and other innovative, collaborative initiatives. In many instances, co-operatives

and credit unions are being asked to set up or retain branches in adjacent Minimum or

Full Convenience centres.

At the Complete Shopping Centre level, co-operatives play a less essential role than in

the lower functional categories. Nevertheless, they continue to have an important impact

on price competition, particularly in nearby communities where branches are located.

This is becoming increasingly difficult, however, since co-operatives in this category face

The study identified examples where

co-operatives and credit unions,

through the use of collaborative

ventures, have been able to maintain

existing services in vulnerable

communities, expand the range of

services provided, and introduce

entirely new ones not possible without

using collaborative models to

leverage limited resources.

tougher economic conditions than those in lower levels. This is

due partially to the high level of competition in those communities,

and also to the fact that communities as a whole in the

Complete Shopping category are having considerable difficulty

maintaining services. As in the Partial Shopping level, co-operatives

face the dilemma of providing services while not forcing

other firms out of business. Equally important is the challenge

of providing credit to farmers, when other financial institutions

have left the community or nearby towns.

Innovation also appears to be an important factor. The study identified examples

where co-operatives and credit unions, through the use of collaborative ventures, have

been able to maintain existing services in vulnerable communities, expand the range of

services provided, and introduce entirely new ones that would not have been possible

without collaboration to leverage limited resources.

At the Secondary Wholesale-Retail level, the role and importance of co-operatives

changes once again. As Figure 2 illustrates, the importance of nonprofit co-operatives

such as child-care, playschool, and preschool co-operatives—increases substantially.

8 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


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Alone or in partnership with other organizations, for example, co-operatives have been

active and innovative in the provision of child-care and health facilities, programs, and

outreach. A small but significant step has been taken to promote home ownership among

low-income tenants using the co-operative model, and a related project has been undertaken

to provide training and self-employment opportunities for people lacking attractive

employment prospects.

Communities Child Care Preschools

0.90

0.80

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.00

Minimum

Convenience

Full

Convenience

Partial

Shopping

Complete

Shopping

Secondary

Wholesale-

Retail

Primary

Wholesale-

Retail

Functional Category

Figure 2: The relative share of child-care and preschool co-operatives in communities classified

by functional category, 1966

At the same time, retail co-operatives and credit unions continue to play an important

role. This is particularly true in cities such as North Battleford, Yorkton, Prince Albert,

and Swift Current, where both types of institutions hold significant market share. Moreover,

the co-operatives and credit unions based in the larger centres have been able to respond

to requests from outlying communities to help with the establishment of satellite

service outlets offering a quality and range of services that would otherwise be unavailable

locally. The existence of these branches also means that the co-operatives and credit

unions will be able to capture a reasonable share of the market outside the city in addition

to the market within the city.

In some respects, the role of co-operatives at the Primary Wholesale-Retail level is also

somewhat reduced compared to the smaller centres. The financial co-operatives in both

U NIVERSITY OF S ASKATCHEWAN • 9


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Saskatoon and Regina are doing well, and the retail co-ops play the role of third grocery

firm in both centres, thereby reducing the possibility that the dominant firms can freely

exercise market power. The social importance of co-operatives at this level of the functional

hierarchy is in providing services to particular groups. Child-care, preschool, and

housing co-operatives are obvious examples (see Figure 2), as well as mutual self-help

groups. The Primary Wholesale-Retail centres also house the head offices of the large

co-operatives, utilizing city services and contributing directly through employment,

taxes, and community involvement.

Co-operatives continue their long-standing

role as providers of goods and services in a

manner that serves the collective interests of

their members.

Summary

Co-operatives continue their long-standing role as providers of goods and services in a

manner that serves the collective interests of members. Their strong presence in smaller

communities is notable. They provide local outlets in many small centres, and whether

or not their prices are lower than elsewhere, they are valued for the convenience and costsavings

generated when patrons can avoid trips to larger centres. There are many additional

economic and social impacts in the local economy. The community interviews

provide considerable evidence, for example, that co-operative managers and boards are

sensitive to the potential impacts of aggressive competition

with other local businesses. With locally

controlled co-operatives especially, there is often a

community survival consciousness at work that leads

them to seek win-win solutions.

Co-operatives (this term will refer to credit unions as well), by their nature, are likely

to behave differently from other institutions. While private firms focus on the economic

interests of owners when making decisions, co-operatives can take a wider view and consider

the more broadly defined welfare of a larger group—their members, as well as the

broader community. As a result, co-operatives can be expected to make decisions that are

qualitatively different from those made by privately owned firms.

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S OCIAL AND E CONOMIC I MPACT A NALYSIS •

Building Social Infrastructure

Co-operatives are important to each other as trading or business partners, as allies in

community projects, and as part of a local culture of co-operative enterprise. The case

studies in theCommunity Profiles” section of this report support the contention that

co-operatives have generally had a stabilizing effect in the regional economy, contributing

to a positive environment that promotes long-term individual, community, private-, and

public-sector investment.

Their stabilizing role is particularly evident in more vulnerable

localities and among less-advantaged participants. There is a

strong commitment to rural Saskatchewan, for example, where

co-operatives provide credit, services, and attractive terms even

to small-volume customers or clients. Both retail and financial

co-ops use a certain measure of flexibility and discretion in helping

new firms, young families, or financially stressed farmers

through difficult situations. Given the cyclical character and

weather sensitivity of much of the resource-based rural economy,

this is an important contribution. In addition, co-op

Co-operatives play key roles in

community economic development

and in the development of

community. Many Saskatchewan

co-ops have promoted new approaches

to community outreach

and development, and

have supported such activities

even though they may not be

directly tied to the particular

organization.

credit managers sometimes finance ventures that do not appeal to other lenders—enterprises

that may seem too risky, too long-term, or unlikely to yield high rates of financial

return. Their willingness to make such investments engenders loyalty in both members

and the community at large, which has a collective interest in creating new employment

and in protecting existing businesses. This role as creditor and supplier to individuals or

enterprises in marginal economic circumstances requires a supportive but vigilant board.

Co-operatives play key roles in community economic development and in the development

of community. Many Saskatchewan co-ops have promoted new approaches to

community outreach and development, and have supported such activities even though

they may not be directly tied to the particular organization. Many have also sponsored

innovative programs to address long-standing social and economic problems, including

access to home ownership, child-care services, more holistic health care, and attractive

U NIVERSITY OF S ASKATCHEWAN • 11


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

employment opportunities. Co-operatives continue to be important in developing and

maintaining social infrastructure, and in creating communities that make economic

activity possible and meaningful.

Recent initiatives to integrate and serve new groups highlight the role of co-operatives

in strengthening communities. Although such initiatives have been a long time coming,

co-operatives are now in the vanguard, employing innovative outreach activities to help

build stronger and more positive relations between aboriginal communities and other

peoples throughout Saskatchewan. This is

Many of Saskatchewan’s co-operatives have highly visible

roles in the economy. Some other contributions may not

be as immediately apparent. Co-operatives help to fund,

support, and promote the activities of a wide array of voluntary

groups, as well as strategic partnerships among

government, business, and community organizations.

an important contribution to our joint future

as inhabitants of the region, and one

that deserves fuller study and development.

Co-operatives are involved in restructuring

the regional economy. In some situations,

this involves branch closure and consolidation. In others, it involves collaborations

or creating new co-operative entities through amalgamation. Saskatchewan-based co-operatives

are also active locally, regionally, and beyond the province’s borders in developing

joint ventures with other kinds of economic organizations, public agencies, governments,

and Indian bands. Co-operative managers have been prominent in REDAs and SBLAs.

And while co-operatives in larger centres may draw clientele from a considerable range,

they have also helped to preserve access to services and to stabilize local economies in a

number of rural communities. This has happened through the establishment of branches

or agency outlets in smaller centres where local co-operatives have been in need of new

capital and technical support. Given their strong roots in local places, co-operatives have a

compelling impulse to participate in and promote new arrangements for providing quality

services in communities of various sizes, including smaller or more remote rural centres.

As established organizations, co-operatives are frequently involved as partners in other

community economic development endeavours. This involvement ranges from provision

of services and cash contributions, to assumption of leading roles in organizations attempting

innovative projects.

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Co-operatives are well integrated into the province’s economy, and into communities

at many levels. Their links to other co-operatives and other organizations or agencies provide

information and resources to support and enrich what is available locally. There is, of

course, room for improvement, with many unexplored opportunities for lateral sharing of

experiences, resources, and ideas.

Many of Saskatchewan’s co-operatives have highly visible roles in the economy. Some

other contributions may not be as immediately apparent. Co-operatives help to fund,

support, and promote the activities of a wide array of voluntary groups, as well as strategic

partnerships among government, business, and community organizations. Contributions

to the community include both direct donations of resources, and the promotion of staff

initiatives in diverse community organizations. Co-operatives often take the lead in philanthropic

community enterprises, there appearing to be a broad expectation among

managers, members, and others that this is part and parcel of the co-operative mandate.

Building Personal Infrastructure

The problems faced by communities of all sizes today are inextricably intertwined with

an old phenomenon, now popularly called globalization. These problems have a number

of characteristics.

• They are often ill-defined, or there is disagreement as to how they should

be defined.

• Several stakeholders have a vested interest in the problem and they are

interdependent.

• These stakeholders are not necessarily identified in any systematic way.

• There may be disparity of power or resources among them.

• They may have differing levels of expertise or access to information.

• Differing perspectives on the problems often lead to adversarial relationships.

• Incremental or unilateral efforts to deal with the problems typically produce

less than satisfactory solutions.

• Traditional approaches and existing processes for addressing the problems

have proven insufficient and may even exacerbate them.

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

There are other approaches that can result in more sustainable growth in small population

centres—approaches by which people are empowered to affect the course of social

and economic change, following priorities that they set according to community, democratic,

or other values. Such approaches start with the community as a focal point, providing

mechanisms to enhance the development of local leadership and control. The essential

success factor is local control in the definition of needs, solutions, and evaluation. Our

research has documented the role of co-operatives in providing such mechanisms.

Co-operatives can have a strong

impact on both the current leadership

in rural communities and

the development of new leaders.

Co-operatives can have a strong impact on both the current

leadership in rural communities and the development of new

leaders. Co-operatives are participatory democratic organizations,

and involvement on co-operative boards can help prepare individuals

for more general community leadership.

In addition to providing a mechanism for democratic participation, co-operatives

provide opportunities to work together collaboratively. Collaboration is a process through

which parties who see different aspects of a problem can constructively explore their differences

and search for solutions that go beyond their own limited vision of what is possible.

It involves building a common understanding of how these images appear from

their respective points of view; this understanding forms the basis for choosing a course

of action, to advance the collective good of the stakeholders involved. Fundamental to this

approach is community-based planning, which considers all the

community stakeholders, including established business, community

groups, and individuals. The notion of partnership is a

central feature. Unfortunately, co-operation and collaboration

during times of scarce resources require effort and understanding,

sharing and trust—something that builds over time, and

not without some kind of support system and the encouragement

of a different set of values.

Leaders need a vision of what

collaboration can accomplish,

sensitivity, and the ability to develop

relationships with diverse

stakeholders. Diversity in opinion

and experience contributes to

this ability.

To accomplish this, leaders need a vision of what collaboration can accomplish, sensitivity,

and the ability to develop relationships with diverse stakeholders. Diversity in

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opinion and experience contributes to this ability. Co-operatives can include a diversity of

people and opinions from the community on their boards, which will help to strengthen

and multiply the synergies among people and increase the numbers of those available for

leadership. Unfortunately, women, youth, and disadvantaged groups are under-represented

in leadership positions generally, and in the co-operatives and credit unions in this

study specifically.

To become effective collaborators, leaders need to

become “process literate”; that is, to possess the knowledge

of the process tools, both human and organizational, for

designing effective collaborations. Cultivating leaders with

Through the support of education and

training initiatives, co-operatives can increase

their involvement in building the

capacity of their members to take on

leadership roles in the community.

these special competencies is essential for managing multicommunity problems in a

collaborative manner.

Of primary importance is the ability to place decision making within a context; to

feel the connection to community and community welfare, rather than responding primarily

to individualistic motives. The ability to examine problems in a holistic way has

to be encouraged, by inclusion in educational curriculum at primary, secondary, and postsecondary

levels, and in leadership development programs for organizations and for those

who work within communities. We cannot assume that individuals are automatically able

to do this on their own.

Through the support of education and training initiatives, co-operatives can increase

their involvement in building the capacity of their members to take on leadership roles in

the community. Examples include supporting co-operative youth seminars, provincial and

regional conferences, and other community-based programs, as well as their own internal

leadership development programs. Such programs must incorporate a focus on the leadership

skills required to successfully engage in collaborative initiatives.

Finally, co-operatives can and do provide leadership in networking and the development

of social capital among individuals in the community, through the staff or the elected

side of the organization, horizontal links to other co-operatives in other communities,

or vertical links to larger organizations such as the Canadian Co-operative Association.

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Conclusions and Recommendations

Co-operatives promote local pride and social integration, local control and local reinvestment.

Their organizational structure adds an important diversity to the mix of enterprises

in the province. Their presence promotes stability and allows Saskatchewan residents to

respond innovatively to many kinds of opportunities and needs. Co-operatives have a long

track record in the province and appear to be engaged in organizational renewal that will

allow them to continue to make crucial contributions to sustainable economic development

well into the next millennium.

Recommendations

The co-operative model should be promoted as a financially viable institutional

form for providing goods and services to a group or a community,

especially when this provision requires knowledge of the local economy

and/or is sensitive to profitability.

Statistical profiles of co-operative contributions to the economy are

critical for promoting and developing the sector. Continue to work with

the co-operative sector to collect financial information from all provincial

co-operatives for storage in an electronic database.

Co-operatives in many places have capitalized on their image, and on public

support for co-operative enterprise, to aggressively market membership and services to

new groups. The record in Saskatchewan is mixed, but there could be more attention

to this opportunity for growth and renewal.

Recommendation

Co-operatives are well positioned to engage effectively in various forms

of social marketing. They can market their service to new groups by emphasizing

the social equity, environmental stewardship, democratic, user

ownership, and community development aspects of their enterprises.

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Co-operatives Behave Differently

Provision of Goods and Services at Competitive Prices

One of the traditional roles for co-operatives is to provide products and services at competitive

prices. As the number of businesses in a community declines, the ability of the

remaining firms to charge higher prices may increase. Unlike profit-oriented firms, however,

co-operatives do not have the same incentive to raise prices. Members realize that

while this may make the co-operative more profitable, it will adversely affect their welfare

when they purchase products.

Provision of Goods and Services Not Otherwise Available

Co-operatives also have a role in providing goods and services that would otherwise not be

available. In smaller communities, sales are often reduced to the point where an adequate

rate of return cannot be earned. Eventually, the business in this situation will leave the

community. A co-operative may be willing to supply the good, however, if this reduces

the cost members would have to incur if they obtained the good elsewhere. A focus on

the welfare of the group can thus lead to behaviour different from a focus on the welfare

of a single institution.

Co-operatives have behaved differently from other institutions in terms of their

pricing, their commitment to community rather than individual interests, and their

ability to provide goods and services that retain a portion of the income in the community.

This is especially true in smaller and more geographically isolated

communities.

Recommendation

The co-operative model needs to be promoted for use as a community

development strategy. Co-operative leaders should continue to undertake

educational activities to demonstrate the effectiveness of the cooperative

approach.

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

The Stabilizing Effect of Co-operatives

Community versus Self-Interest

Co-operatives allow people to see the repercussions of their individual actions on the

community. People often decide to shop in larger centres, for example, because of price

or choice considerations. When many people do this, however, the result is reduced sales

for local businesses. Over time, this can lead to the closure of firms and/or higher prices

locally. Collective ownership of a business gives co-operative members the opportunity to

observe the effect of by-passing their local market, and an opportunity to benefit from a

deliberate choice to patronize the local establishment.

Providing Stability

Co-operatives are important to each other as trading or business partners, as allies in

community projects, and as part of a local culture of co-operative enterprise. Co-operatives

have generally had a stabilizing effect in the regional economy, contributing to a

positive environment that promotes long-term individual, community, private-, and

public-sector investment.

Their stabilizing role is particularly evident in more vulnerable localities and among

less-advantaged participants. There is a strong commitment to rural Saskatchewan, where

co-operatives provide credit, services, and attractive terms even to small-volume customers

or clients. In addition, co-op credit managers sometimes finance ventures that do not

appeal to other lenders—enterprises that may seem too risky, too long-term, or unlikely

to yield high rates of financial return.

Recommendation

Co-operatives must be encouraged to continue with community

development initiatives by supporting member and leader education

and training programs. These programs should provide co-operatives

and communities with a better understanding of what community

development involves, and what co-ops and other organizations can

do to facilitate it.

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Recommendation

Support must be provided for the start up of new co-operative enterprises

and the development of new co-operative forms. Co-operatives work

best in a context where there is a multiplicity of co-operative firms, operating

in multiple sectors, and where people attend to the preservation of

co-operative identity and co-operative principles.

Strengthening Communities

Co-operatives play key roles in community economic development and in the development

of community. Co-operatives continue to be important in developing and maintaining

social infrastructure, and in creating communities that make economic activity

possible and meaningful.

Globalization presents risks, challenges, and options for Saskatchewan communities.

Co-operatives provide opportunities to participate in global exchange without sacrificing

local control.

There is growing worldwide interest in co-operative organizations as vehicles for

economic and social development. The vibrant co-operative sector in Saskatchewan

opens opportunities for international exchanges, trade, and collaboration.

Recommendations

Document the role of co-operatives in sustainable development.

Develop expertise in the potential of co-operatives as vehicles for

sustainable development.

Recognize and develop co-operatives as organizations that facilitate

global linkage, exchange, and co-operation.

Further develop national and international linkages for trade, mutual

assistance, and personnel exchange. Partner with international agencies

and co-operative organizations for mutual learning.

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Strengthening the Regional Economy

Significant changes are occurring in the spatial organization of co-operative activities.

This includes some consolidation into larger centres, and investment in selected smaller

centres. In some cases, larger urban-based co-operatives are helping to stabilize and

revitalize co-operatives in rural communities. Given their strong roots in local places,

co-operatives have compelling reasons to participate in and promote new arrangements

for providing quality services in communities of various sizes—including smaller or

more remote rural centres.

Recommendations

Develop partnerships among co-operatives, communities, and agencies

to achieve regional development objectives. Augment mutually advantageous

rural-urban linkages through co-operatives. Increase involvement

in REDAs to ensure that the co-operative model is considered when new

services are developed. Evaluate alternatives for the reorganization and

relocation of co-operatives in the context of collaborative, strategic,

regional planning.

Institute a regional co-operative development council and/or a cooperative

development foundation to support new community and cooperative

initiatives; federal, provincial, and regional agencies to partner

with co-operatives and help fund rural co-operative development.

Other Roles in the Economy

Co-operatives are well integrated into the province’s economy, and into communities at

many levels. Their links to other co-operatives and other organizations or agencies provide

information and resources to support and enrich what is available locally.

Co-operatives help to fund, support, and promote the activities of a wide array of

voluntary groups, as well as strategic partnerships among government, business, and

community organizations.

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Co-operatives have important roles strengthening linkages within and among communities

and sectors. Co-operatives continue to be important sites of social innovation,

and key partners for multi-sectoral collaboration.

Recommendation

Recognize the co-operative advantage in promoting partnerships

and collaboration; document co-operative support for community

and voluntary organizations.

Providing Leadership

Leadership

Co-operatives have a strong impact on both the current leadership in rural communities

and the development of new leaders. Collaborative models, both formal and informal,

are increasingly being used to strengthen co-ops by leveraging limited resources, and to

provide services in vulnerable communities. To be successful in collaborative ventures,

leaders require the ability to develop relationships with diverse stakeholders. Co-operatives

can build on their strengths in this area by welcoming greater diversity into their leadership

ranks. Through the support of education and training initiatives, co-operatives can

increase their involvement in building the capacity of their members and employees to

take on leadership roles in the community.

Recommendations

Expand the knowledge of various collaborative models in use through

research and sharing of best practices. Such knowledge has to be

linked to leadership training programs, where collaborative skills are

emphasized.

Support further educational experience in co-operation and community

economic development for interested personnel. Promote exchanges,

visits, networking, and collaborative projects.

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Recommendation

Build employee loyalty and demonstrate broader concern for human

development by showing leadership in the implementation of progressive

labour relations. Co-operatives should strive to be seen as highly desirable

places to work given the whole package of conditions, benefits, and

opportunities that they can provide.

Diversity

There is an ongoing need to find new ways to make co-operative board and staff

positions accessible and attractive to under-represented groups, including women,

young people, new immigrants, and aboriginal persons. Some co-operatives can boast

important advances in this regard, providing examples and inspiration for co-operatives

and other organizations that have made slower progress on these agendas.

Recommendations

Co-operatives should emulate effective practices: develop appropriate

services and capacities; pursue equity goals in employment, appoint

aboriginal liaison committees, and seek partnerships with aboriginal

bands, councils, and development authorities.

Consider methods adopted elsewhere such as Gender Sensitivity Training

(GST); a focus on Gender and Development (GAD) issues; and mentoring

of female managers, staff, and directors. Continue to support the

“Women and Co-operatives Forum” on a regional basis.

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Conclusions

The co-operative sector in Saskatchewan is

financially healthy.

Statistical profiles of co-operative contributions to

the economy are critical for promoting and developing

the sector.

Co-operatives are well positioned to engage

effectively in various forms of social market-

ing. Co-operatives can market their service to

new groups by emphasizing the social equity,

environmental stewardship, democratic, user

ownership, and community development aspects

of their enterprises.

Co-operatives in many places have capitalized

on their image, and on public support

for co-operative enterprise, to aggressively

market membership and services to new groups.

The record in Saskatchewan is mixed, but there

could be more attention to this opportunity for

growth and renewal.

Co-operatives have behaved differently from other

institutions in terms of their pricing, their commitment

to community rather than individual interests,

and their ability to provide goods and services that

retain a portion of the income in the community.

This is especially true in smaller and more geographically

isolated communities.

Co-operatives strengthen economic activity

and employment through community

development initiatives.

Support the start up of new co-operative enter-

prise and the development of new co-operative

forms. Co-operatives work best in a context

where there is a multiplicity of co-operative

firms, operating in multiple sectors, and where

people attend to the preservation of co-operative

identity and co-operative principles.

The co-operative model is proving adaptable

to many organizational objectives. New cooperative

institutions are being built to pursue

endeavours as diverse as farmer-owned processing

facilities and housing for low-income urban

residents.

Globalization presents risks, challenges, and options

for Saskatchewan communities. Co-operatives

provide opportunities to participate in global

exchange without sacrificing local control.

Document the role of co-operatives in sustainable de-

velopment. Develop expertise in the potential of co-

operatives as vehicles for sustainable development.

Rural, resource-based industries face

important technical and social challenges

with respect to sustainable development.

Recommendations

The co-operative model should be promoted as a

financially viable institutional form for providing goods

and services to a group or a community, especially

when this provision requires knowledge of the local

economy and/or is sensitive to profitability.

Continue to work with the co-operative sector to

collect financial information from all provincial

co-operatives for storage in an electronic database.

The co-operative model needs to be promoted for use

as a community development strategy. Co-operative

leaders should continue to undertake educational

activities to demonstrate the effectiveness of the

co-operative approach.

While activity in this area has increased, co-operatives

must be encouraged to continue by supporting member

and leader education and training programs. These

programs should provide co-operatives and communities

with a better understanding of what community development

involves, and what co-ops and other organizations

can do to facilitate it.

Recognize and develop co-operatives as organizations

that facilitate global linkage, exchange, and co-operation.

U NIVERSITY OF S ASKATCHEWAN • 23


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Conclusions

Further develop national and international

linkages for trade, mutual assistance, and

personnel exchange. Partner with interna-

tional agencies and co-operative organizations

for mutual learning.

There is growing worldwide interest in

co-operative organizations as vehicles for

economic and social development. The

vibrant co-operative sector in Saskatchewan

opens opportunities for international exchanges,

trade, and collaboration.

Significant changes are occurring in the

spatial organization of co-operative

activities. This includes some consolidation

into larger centres, and investment

in selected smaller centres. In some cases,

larger urban-based co-operatives are helping

to stabilize and revitalize co-operatives in

rural communities.

As established organizations, co-operatives

are frequently involved as partners in other

community economic development endeavours.

This involvement ranges from provision of

services and cash contributions to assumption

of leading roles in organizations attempting

innovative projects.

Co-operatives have important roles

strengthening linkages within and among

communities and sectors. Co-operatives

continue to be important sites of social

innovation, and key partners for multisectoral

collaboration.

Collaborative models, both formal and

less formal, are increasingly being used to

strengthen co-ops by leveraging limited

resources, and to continue to provide

services in vulnerable communities.

Support further educational experience in

co-operation and community economic de-

velopment for interested personnel. Promote

exchanges, visits, networking, and collaborative

projects.

Co-operative managers, staff, and directors

are involved in numerous community

development projects. There are many

opportunities for increasing and strengthening

this activity.

Some co-operatives have implemented employment

equity plans, taken steps to reduce

conflicts between demands of home and workplace,

and have fostered the full development of

their staff and managers. Others have not done

much more than meet minimum regulatory

requirements.

Recommendations

Develop partnerships among co-operatives, communities,

and agencies to achieve regional development objectives.

Augment mutually advantageous rural-urban linkages

through co-operatives. Increase involvement in REDAs

to ensure that the co-operative model is considered when

new services are developed. Evaluate alternatives for the

reorganization and relocation of co-operatives in the

context of collaborative, strategic, regional planning.

Institute a regional co-operative development council

and/or a co-operative development foundation to

support new community and co-operative initiatives;

federal, provincial, and regional agencies to partner

with co-operatives and help fund rural co-operative

development.

Recognize and document this co-operative

advantage; promote research and training to

reinforce this dynamic.

Expand the knowledge of various models

in use through research and sharing of

best practices. Such knowledge has to be

linked to leadership training programs,

where collaborative skills are emphasized.

Build employee loyalty and demonstrate

broader concern for human development by

showing leadership in the implementation

of progressive labour relations. Co-operatives

should strive to be seen as highly desirable

places to work given the whole package of

conditions, benefits, and opportunities that

they can provide.

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S OCIAL AND E CONOMIC I MPACT A NALYSIS •

Conclusions

Co-operatives have demonstrated leadership

in developing services and programming

for, and partnerships with, aboriginal

communities and organizations. This is an

important economic and social contribution.

Recommendations

Co-operatives should emulate effective practices:

develop appropriate services and capacities; pursue

equity goals in employment, appoint aboriginal liaison

committees, and seek partnerships with bands, councils,

and development authorities.

Women provide support and leadership for

community organizations in many capacities,

but continue to be under-represented in cooperative

management and board positions.

Co-operatives have a special reason to address

this equity issue, given the strong potential

attraction that co-operative enterprise hold

for women.

Consider methods adopted elsewhere such as Gender

Sensitivity Training (GST); a focus on Gender and

Development (GAD) issues; and mentoring of female

managers, staff, and directors. Continue to support

the “Women and Co-operatives Forum” on a

regional basis.

U NIVERSITY OF S ASKATCHEWAN • 25


Conceptualizing the Social

and Economic Impact

of Co-operatives

Co-operatives have been instrumental in shaping the economic, political, social,

and cultural reality of Saskatchewan, and in turn, have been shaped by all these

forces. Co-operatives have been prominent in the politics and commercial history of the

province, and have influenced the character of community life. With strong and long

roots, Saskatchewan’s co-operative movement has contributed to the development of the

national and international co-operative sector. These links have brought many visitors,

innovative ideas, and resources to the province. Given the influence of co-operatives in

key institutions and sectors, it could be argued that Saskatchewan is the quintessentially

co-operative province.

Conceptualizing Social and Economic Impacts

Attempts to distinguish between the “social” and the “economic” aspects of real lives and

real communities quickly founder unless one is willing to embrace enormous simplifying

assumptions. Economic decisions and policies—even strictly commercial endeavours—

always have social implications, which can be more or less positive for the communities

and individuals concerned. Likewise, social policies, initiatives, and conditions have

economic implications. What we recognize as a modern, developed society encompasses

many social and economic variables that are intimately combined in our institutions,

organizations, traditions, and conventions.

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C ONCEPTUALIZING S OCIAL AND E CONOMIC I MPACTS •

Matters such as quality health care, public education, democratic institutions, access

to opportunity, employment equity, and social peace are inextricably intertwined social

and economic concerns. The connection between these concerns, and the need to address

them together, is one of the first principles of sustainable development, which necessarily

implies finding ways to integrate multiple objectives.

Tension among social, political, and economic agendas is a given in all complex

organizations. In co-operatives and the co-op movement, however, this creative tension

is tuned to a higher pitch, and is a more recognized aspect of the organizational culture.

In theory and in practice, co-operatives have always combined marketplace objectives with

the broader mandates associated with social movements. Co-operatives have inevitably

involved a re-balancing of individual and collective interests. And there has never been a

moment when the economic and social dimensions of investment and programming decisions

have been completely divorced.

It is not a simple task to evaluate the social and economic impacts of complex organizations

such as co-operatives. Moreover, significant outcomes usually have multiple

causes. Only when a certain number of conditions coincide is it possible for leaders to

implement what they have learned, or for community entrepreneurs to launch a successful

project. Many individual talents and collective potentials remain undeveloped because

certain crucial factors are absent, or because certain blocking factors cannot be overcome.

Co-operatives play a double role here, adding to the resource mix and changing the “field

conditions” so that innovative ideas can germinate and take root.

The impacts of co-operatives are both direct and indirect. While direct impacts may

be more obvious and measurable, the cumulative though more diffuse consequences of

second- and third-order knock-on effects can be, in the end, more lasting and significant—comparable

to the splash and ripple dynamics when an object hits the surface of

water. The potential stabilizing effect of co-operative organizations is an example of the

latter kind. Inasmuch as co-operatives represent a stable element in the regional economies

of the province, they may help to create a positive climate for investment and reinvestment

by individuals, firms, and governments. The cumulative impacts—with respect

U NIVERSITY OF S ASKATCHEWAN • 27


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

to employment, real estate markets, the tax base, and access to goods and services—may

mean the difference between community renewal, or decapitalization and decline. This is

particularly true where the local economy is vulnerable, small, and relatively isolated, as in

some rural settings. There, the stabilizing presence of a co-operative or credit union may

tip the balance between equilibrium and regression, and the beneficiaries will not all be

members or patrons of the co-operative.

Some of the social and economic impacts of co-operative organizations and enterprises

may be far removed from the place and time of origin. Leadership skills developed in a coop

management role, for example, may have their most significant play years later, in an

altogether different context. Measuring these and other such impacts is a truly complex

activity. To start to do so, we have combined several kinds of evidence, examining each

in the light of the other. These data include the quantitative materials that constitute the

“Sectoral Analysis,” and the qualitative, contextualized details provided by interviews with

key informants in four sets of community case studies. Finally, and no less important, we

have reviewed a growing body of literature that speaks to these issues, and have analysed

these works in light of collected experiences studying co-operatives from several disciplinary

perspectives.

Building and Sustaining Communities

The links between social and economic issues are highlighted in community development

and community economic development. The latter (CED) represents a conscious effort to

incorporate both economic and social goals by generating wealth that remains in the community;

striving to include marginalized groups and individuals; and combining the development

of an “enterprise culture,” based on a philosophy of self-reliance, creativity,

and innovation, with a commitment to co-operation, equity, and broad participation

(Walker 1994 ).

These links are also central to the conceptualization of “social capital” as an important

ingredient in the formation of “entrepreneurial communities” (Flora and Flora 1993).

Social capital can be defined broadly as “those voluntary means and processes developed

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C ONCEPTUALIZING S OCIAL AND E CONOMIC I MPACTS •

within civil society which promote development for the collective whole.” These means

and processes reduce impediments to social interaction; engender social bonding as reflected

in trust, confidence, and respect for others; and give rise to genuine alternatives

for a development whose defining features include that it is humane, sustainable, empowering,

synergistic, catalytic, mobilizing, and accountable (Thomas 1996). For the purposes

of her research in American rural communities, Flora (1995) has defined social capital to

include aspects such as inclusive vertical and horizontal networks; a broad definition of

useful resources and contributions; equality of access; a broad conception of community

membership; and a commitment to open, democratic processes. While these dynamics

alone may not be sufficient to sustain the development of regional economies and community

institutions, their absence renders the outlook for successful pursuit of community

development much less optimistic. Moreover, deficits in these categories may reduce

the effectiveness of any investments in physical infrastructure, or in the training and

education of individuals as “human capital.”

The development of regions and communities thus depends on an array of interacting

social, political, and cultural issues as much as on initial resource endowments, geography,

historic position within the global economy, and public and private investment. What is

the impact of co-operatives in this context? Co-operative organizations themselves are the

outcome of development processes; they are also the site for the reproduction and expansion

of social capital. In the latter sense, co-operatives have brought people together within

communities, sectors, and regions to address common concerns or objectives, and are a

constant reminder that citizens can create and sustain new organizations to pursue shared

goals. Moreover, co-operatives are a school for democratic processes, where members,

directors, and staff learn how to manage complex organizations and multiple objectives

in a framework of co-operation and democratic participation. Co-operatives extend the

networks of people in small communities, joining local organizations both horizontally

and vertically to the resources of similar or related organizations on a regional and national

scale. The crucial character of these networks is mutualism: all participants benefit

from the relationship.

U NIVERSITY OF S ASKATCHEWAN • 29


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Given their character, which combines aspects of both private- and public-sector

organizations, co-operatives have also been sought out as key partners for joint ventures,

or projects involving community organizations and state agencies, as well as other enterprises,

groups, and individuals. In an era when partnership is an indispensable strategy for

improving the effectiveness of developmental efforts undertaken by governments, quasigovernmental

organizations, and corporate investors, this capacity of co-operative organizations

becomes an even more valuable asset. In Saskatchewan, co-operatives sustain and

strengthen links within and between industries or economic sectors, and also regions and

communities. Co-operatives also provide useful links among different kinds of organizations

and agencies in the private, community, and public spheres.

Co-operatives in Saskatchewan are involved in a wide range of activities that mix

social and economic objectives in varying proportions. They provide organizational

diversity, which is necessary if suitable vehicles are to be found for responding to a broad

range of conditions and needs. The investor-owned firm may be quite adaptable, but it

does not work well in every circumstance. Co-operatives are a vehicle for investment in

regional economies that will often yield higher combined returns in a number of domains

that are of interest to people in their various capacities as citizens, community members,

and businesspeople.

Economists measure the total impact of spending in a particular sector by calculating

economic multipliers—the value by which an initial dollar of spending is increased as it

works its way through the economy. This approach may focus on income or employment

multiplier effects, and regional or local community-level impacts. The methodologies include

comprehensive input-output models; estimation of regional employment or income

contributions of particular industries; and regional income models designed to reveal the

different impacts of spending in smaller and larger communities (Olfert and Stabler 1994).

These tools are useful in estimating the size and location of the economic impacts of new

spending or investment.

There are, however, other crucial considerations. The approach outlined above leaves

aside the impacts of organizational behaviour and enterprise structure on both economic

30 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


Co-operative Principles

Definition

A co-operative is an autonomous association of persons

united voluntarily to meet their common economic,

social, and cultural needs and aspirations through a

jointly owned and democratically controlled enterprise.

Values

Co-operatives are based on the values of self-help,

self-responsibility, democracy, equality, equity, and

solidarity. In the tradition of their founders, co-operative

members believe in the ethical values of honesty,

openness, social responsibility, and caring for others.

Principles

The co-operative principles are guidelines by which

co-operatives put their values into practice.

First Principle:

Voluntary and Open Membership

Co-operatives are voluntary organisations, open to all

persons able to use their services and willing to accept

the responsibilities of membership, without gender,

social, racial, political, or religious discrimination.

Second Principle:

Democratic Member Control

Co-operatives are democratic organisations controlled

by their members, who actively participate in setting

their policies and making decisions. Men and women

serving as elected representatives are accountable to

the membership. In primary co-operatives, members

have equal voting rights (one member, one vote) and

co-operatives at other levels are also organised in a

democratic manner.

Third Principle:

Member Economic Participation

Members contribute equitably to, and democratically

control, the capital of their co-operative. At least part

of that capital is usually the common property of the

co-operative. Members usually receive limited compensation,

if any, on capital subscribed as a condition

of membership. Members allocate surpluses for any

or all of the following purposes: developing their cooperative,

possibly by setting up reserves, part of which

at least would be indivisible; benefiting members in

proportion to their transactions with the co-operative;

and supporting other activities approved by the

membership.

Fourth Principle:

Autonomy and Independence

Co-operatives are autonomous, self-help organisations

controlled by their members. If they enter into agreements

with other organisations, including governments,

or raise capital from external sources, they do

so on terms that ensure democratic control by their

members and maintain their co-operative autonomy.

Fifth Principle:

Education, Training, and Information

Co-operatives provide education and training for

their members, elected representatives, managers, and

employees so they can contribute effectively to the development

of their co-operatives. They inform the general

public—particularly young people and opinion

leaders—about the nature and benefits of co-operation.

Sixth Principle:

Co-operation among Co-operatives

Co-operatives serve their members most effectively

and strengthen the co-operative movement by working

together through local, national, regional, and international

structures.

Seventh Principle:

Concern for Community

Co-operatives work for the sustainable development of

their communities through policies approved by their

members.

Source: MacPherson 1996.

U NIVERSITY OF S ASKATCHEWAN • 31


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

and social variables of interest to community members. Though more difficult to estimate

than economic multipliers, it is clear that organizational forms and practices will affect,

among other things, the degree to which wealth is retained in the local region, and the degree

to which reinvestment decisions are locally controlled. Moreover, organizational differences

among enterprises may yield quite different “social multipliers,” i.e., the quality

as well as the quantity of employment generated, and the degree to which the activity or

enterprise fosters the wider development of capabilities, know-how, and entrepreneurial

initiative—broadly defined (Gertler 1998 forthcoming). Other dimensions of the social

multiplier include the degree to which the activity/enterprise supports the continued development

of community institutions, networks, and identities; and the degree to which

it fosters the integration of marginalized populations, which may include women, youth,

newcomers, and others who are minorities by virtue of numbers or exclusion.

Given their historical record, their dual character as economic and social organizations,

and the set of principles that underlie co-operative identity (see page 31), it can be

argued that co-operatives offer important advantages as vehicles for increasing both the

economic and the social multiplier effects of new initiatives or investments. Moreover,

their roots in communities and their ownership structure offer the additional advantage

of capturing and keeping more of this increase within the community or region. In this

sense, the practice of co-operation in co-operatives can be said to contribute directly to

the “community multiplier,” which reflects the local impacts of economic and social

multiplier effects combined.

Co-operatives and the Changing

Structure of Communities

We have used the term “community” in connection with community economic development,

community membership, community multipliers, and so on. The character and

structure of communities is changing rapidly. For the purposes of this discussion, we will

consider two related meanings of the term that reflect two connected but distinct forms of

community that are evolving together in the province and elsewhere.

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C ONCEPTUALIZING S OCIAL AND E CONOMIC I MPACTS •

The first type is a place in the geographic, legal, and social sense—the communities

we discuss when we make reference to the settlements located on the map of the province.

These communities, by definition, include everyone who resides in those places.This type

of community is still very important in the lives and livelihoods of Saskatchewan people.

It is in these settings that services are provided, local governments are elected, resources

are managed, homes are built, real estate is bought and sold, businesses are established,

and neighbouring is put into practice. It is here also that diversity and difference are

tolerated or celebrated.

These centres are linked together in a hierarchical system that is characterized by

flows of commodities, capital, information, and population. In that sense, they are also

part of a large network. As discussed below, local communities can also be seen as networks.

People establish relationships based on shared concerns or needs, experiences or

preferences, demographic characteristics or locality. Yet networks need not be strictly

local. Increasingly, people are deriving their pleasures, identities, and livelihoods through

networks that extend outside of local communities of place. These two forms of community

have always coexisted, but due to specialization, communications technologies, and

economic restructuring, spatially expanded (or geographically liberated) networks now

assume greater importance in people’s lives. Such networks—based on shared interests,

tastes, or social projects—expand personal horizons and open up new possibilities for

linkage and collaboration. Yet extra-local networks may also divert energies and identification

away from local communities.

People belong to overlapping networks that may be tightly or loosely knit, more or

less inclusive, and more or less local in terms of membership. Networks in rural places

are often relatively small in terms of numbers of participants. As discussed below, this

renders them more sensitive to the removal or addition of active members. In this sense,

the stabilizing influence of co-operatives in rural centres can become crucial to many

aspects of social and economic life.

U NIVERSITY OF S ASKATCHEWAN • 33


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Networks: A Conceptual Model

Networks are thought to be the basis for communication and information sharing.

Networks allow for synergies and complementarities; in other words, networks allow

ideas, actions, plans, etc., to work together for a combined result that is greater than the

sum of their individual impacts. Networks allow for both specialization and access to new

ideas, i.e., new know-how. A simple network model is shown in figure 1.

Networks are critical in

Network

this process because the basic

Model

elements of communication—

knowledge and know-how—are

different from other inputs. Unlike

fuel, for example, which can

be used once and is gone, knowledge

and know-how can be used

repeatedly by different people in

different locations at the same

Figure 1

time. New know-how, or instructions,

can be created by reconfiguring or combining old instructions in different

ways. Networks increase the opportunities for new instructions to emerge and make it

easier for people to share the knowledge that results.

Figure 2 illustrates the number

of different instructions that

are possible with one, two, three,

and four basic instructions, each

of which can have two values. As

can be seen, the possibilities increase

exponentially, from two,

to eight, to twenty-four, to sixty-

The number of different composite

instructions possible with 1, 2, 3, and

4 basic instructions, each of which

can have two values

Figure 2

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C ONCEPTUALIZING S OCIAL AND E CONOMIC I MPACTS •

four. Extrapolating further from this, figure 3 shows graphically how networks can increase

the opportunity for sharing know-how. As the number of network nodes grows

from zero to fifty, the number of direct connections grows from zero to more than twelve

hundred. Figure 4 is a visual representation of how networks can be reconfigured to create

new sets of instructions and relationships.

Communities can be

thought of as networks.

Networks increase the

Number of Direct

Connections

opportunity for sharing

know-how

When people first arrived on

1400

the prairies, they settled in the 1200

equivalent of the small hexagons

shown in figure 5. There

1000

800

600

was relatively little mobility,

400

transportation, or communication.

People existed largely

0 5 10 15 20 25 30 35 40 45 50

200

0

in their own little cells and

Number of Network Nodes

called it their community.

Figure 3

The local communities existed

in relation to larger towns and cities, but interaction was limited. This used to be our

conceptual model—hierarchical in nature—and it is a model that is no longer adequate.

We are now connected not only with our immediate neighbours, our neighbourhood,

our community, and nearby

towns, but through technology,

with other communities

across the country and around

the world.

Reconfiguring Networks

to Create New Sets

of Instructions

Figure 4

U NIVERSITY OF S ASKATCHEWAN • 35


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Figure 5

Figure 6 shows a sample

community with a number of

nodes and a complex network

of interconnections. In rural

areas, roads can be thought of

as a physical link in the network—arteries

to individual

homes and farms for the

school bus, the fuel truck,

trucks to transport commodities,

service vehicles, friends

coming and going, the family coming and going, etc. If you remove one node (family or

farm) from the network illustrated in figure 6, there is not a simple linear reduction in the

system, but a dramatic shrinking of the interconnecting linkages, as shown in figure 7.

It will affect the entire network. On the other hand, if you add nodes, there will be a

tremendous increase in linkages, to the advantage of the network as a whole. This illustrates

the importance—especially in rural Saskatchewan—of institutions that help to

stabilize or build critical mass in terms of population, service outlets, and places of

employment.

Figures 6 and 7, showing the effect of removing one node from a network illustrating linkages within

a community.

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C ONCEPTUALIZING S OCIAL AND E CONOMIC I MPACTS •

Conclusions

Measuring the societal impacts of co-operatives requires a reconceptualization of the

interconnected character of social and economic life. Co-operatives enter this complex

system by many paths, directly and indirectly. They bring together capital and human

resources to accomplish collective projects beyond the capabilities of individuals, and also

beyond the capabilities—or mandates—of many other kinds of organizations. In addition,

their existence changes the climate and context in which opportunities can be perceived

and pursued. Co-operatives both reflect and contribute to qualities that are among

the most highly valued in our self-concept as a society: a spirit of co-operation and a sense

of collective responsibility and empowerment. The presence of co-operatives may be particularly

crucial in smaller rural centres, where they carry on important networking functions,

and help to stabilize the community networks that make both livelihood and

quality of life possible.

It is difficult to estimate the full impact of co-operatives. One way to grasp it is to ask

what would Saskatchewan have become—and what might it become—in their absence? It

is arguable that the structure of the agro-industrial sector, and with it the social structure

of rural Saskatchewan, would have been considerably different. Retailing, wholesaling, the

financial services sector, and the health sector would all have developed quite differently,

as would the politics of the province, the regulatory environment, and many key policies

and programs. Would we be well placed to take part in the global economy? Would we

have the social and physical infrastructure we now possess? Would we enjoy a national

and international reputation as a caring and engaged society?

What does this exercise in rethinking and reassessment say about the future role of

co-operatives? The questions and observations suggest a need for continuing investigation

of how co-operatives, in their various manifestations, can best contribute to sustainable

development in Saskatchewan. Co-operatives have demonstrated their adaptability and

multi-sided potential. Their legacy is a strong card in the province’s mix of attributes and

assets. Co-operatives can continue to be important organizations for realizing the multiple

bottom lines that reflect our diverse interests as citizens, community members, consumers,

producers, and builders.

U NIVERSITY OF S ASKATCHEWAN • 37


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References

Flora, Cornelia Butler. 1995. “Social Capital and Sustainability: Agriculture and Communities in the

Great Plains and Corn Belt.” Research in Rural Sociology and Development 6: 227–46.

Flora, C.B., and J.L. Flora. 1993. “Entrepreneurial Social Infrastructure: A Necessary Ingredient.”

The Annals of the Academy of Social and Political Sciences 529 (Sept.): 48–58.

Gertler, Michael E. 1998. (forthcoming). “Sustainable Communities and Sustainable Agriculture on

the Canadian Prairies.” In Community Perspectives on Sustainable Development, edited by John Pierce.

Vancouver: University of British Columbia Press.

MacPherson, Ian. 1996. Co-operative Principles for the 21st Century. Geneva: International Co-operative

Alliance.

Olfert, M. Rose, and Jack C. Stabler. 1994. “Community Level Multipliers for Rural Development

Initiatives.” Growth and Change 25 (4): 467–86.

Stabler, Jack C., and M. Rose Olfert. 1996. The Changing Role of Rural Communities in an Urbanizing

World: Saskatchewan—An Update to 1995. Regina: Canadian Plains Research Centre, University of

Regina.

Thomas, Clive. 1996. “Capital Markets, Financial Markets and Social Capital.” Social and Economic Studies

45 (2&3): 1–23.

Walker, Robert C. 1994. Mobilizing Local Capital: A Community Investment Manual. Toronto: The Social

Investment Organization.

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Sectoral Analysis

The Co-operative Sector in Saskatchewan

In conducting a survey of Saskatchewan co-operatives in 1996, we were able to compare

our findings to a similar study published in 1991, which assessed the economic impact

of Saskatchewan co-operatives in 1989. 1 As a result, we have been able to analyse the 1996

data both as a relatively current cross-sectional representation of co-operatives, and temporally,

vis-a-vis the 1989 data. 2

Similar to the findings of the 1991 study (Fulton et al.), co-operatives in Saskatchewan

continue to be involved in a wide range of activities: agriculture and resources, community

development, recreation, child care and education, wholesale and retail, financial,

community service, and other types of co-operation.

Co-operative enterprises in Saskatchewan vary widely

As one of the few remaining businesses

in small centres, a co-operative

in terms of their size and scope. Large co-operatives, such

as the Saskatchewan Wheat Pool (SWP), Credit Union

provides essential employment and

Central (CUC), and Federated Co-operatives Limited

services to residents and has a critical

impact on the survival of rural communities.

(FCL), wield significant economic power in the provincial

economy. Although smaller co-operatives seem insignificant

in comparison, they are major players at the community

level, and two of the largest—FCL and CUC—exist primarily to serve the needs of a

network of smaller retail and financial co-operatives. As one of the few remaining businesses

in small centres, a co-operative provides essential employment and services to resi-

U NIVERSITY OF S ASKATCHEWAN • 39


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

dents and has a critical impact on the survival of rural communities. Distributed throughout

the province in communities of every size, the smaller co-operatives provide important

local economic activity. In addition, they continue to make significant social contributions

to the communities in which they are located, the impact of which is discussed

elsewhere in this report.

There were 1,560 active co-operatives in 1996, an increase of 10.8 percent compared to

the 1989 total of 1,408 (Table 1). Noteworthy changes in the number of co-operatives by

sector include: an increase of 18.3 percent in the number of agricultural and resource cooperatives;

an increase of 20.5 percent in community service co-operatives; an increase of

more than 300 percent in the number of community development co-operatives; and a

decrease of 17.7 percent in the number of recreational co-operatives.

Table 1: Number of co-operatives and active membership, 1989 and 1996

Number of Co-ops

Active Membership

1989 1996 1989 1996

Agriculture & resource 345 408 74,603 72,209

Community development 41 165 186 1,807

Recreation 266 219 17,459 20,805

Child care & preschools 120 133 9,975 8,895

Retail & wholesale 186 192 289,054 283,415

Financial 358 345 583,559 569,849

Community service 39 47 21,334 30,582

Other 53 51 2,194 2,559

Total 1,408 1,560 998,364 990,121

Compared to 1989, the total active membership has remained relatively stable at just

under one million, although significant changes in membership have occurred within

community development, recreation, and community service categories. Many of the

changes in membership can be explained by changes in the number of co-operatives

within these sectors, although agricultural membership actually fell despite the increase

40 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

in the number of co-operatives. Part of the increase in membership of community service

co-operatives (9,248) can be explained by the fact that one health clinic is now reporting

membership by individuals rather than by family unit.

In 1996, total assets controlled by co-operatives in Saskatchewan were $9.19 billion

(Table 2). As was the case in 1989, financial co-operatives accounted for the largest portion,

with $6.99 billion in assets (the breakdown of financial data by co-operative category

for 1996 will be discussed in more detail later in the report). The average debt-to-asset

ratio for all co-operatives in 1996 was 0.46, due in large part to the financial co-operatives,

which had a very high average debt-to-asset ratio (0.94). The financial co-operatives were

not included in the 1989 debt-to-asset calculations, and if they are excluded from the 1996

statistics, the ratio falls to 0.31 for the nonfinancial co-operatives. This ratio is virtually

unchanged from the value calculated for nonfinancial co-operatives in 1989 (0.30), suggesting

a degree of economic stability in the operations of the co-operative sector. Members’

equity for all co-operatives was reported at $1.39 billion in 1996, compared to $0.96 billion

in 1989. Adjusting for the Consumer Price Index (CPI), 3 this represented an actual increase

in members’ equity of 20 percent.

Table 2: Comparison of co-operatives’ aggregate data, 1989 and 1996

Descriptor 1989 1996 % Difference % Difference

(x 1000)* (x 1000)* (unadjusted) (adjusted for

inflation)

Assets $8,745,524 $9,193,276 5.1 -13.2

Liabilities $7,609,845 $7,586,328 -0.3 -17.6

Average debt/asset

All Co-ops na 0.46 na na

Nonfinancial co-ops 0.30 0.31 3.3 na

Members’ equity $958,368 $1,394,194 45.5 20.2

Revenue $3,512,014 $6,903,601 96.6 62.4

Surplus $86,479 $245,613 184.0 134.6

Employees 15,668 14,428 -7.9 na

Wage bill $361,428 $423,844 17.3 -3.1

Capital investment $100,961** $124,268 23.1 1.7

* Except for the number of employees

** Adjusted from figure reported in 1989. See footnote 29 for explanation.

U NIVERSITY OF S ASKATCHEWAN • 41


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Recorded revenues in 1996 were almost double those in the previous study, with cooperatives

generating $6.9 billion, compared to $3.5 billion in 1989. Much of this increase

can be attributed to Saskatchewan Wheat Pool (SWP), which recorded revenues in excess

of $4 billion in 1996, compared to $1.6 billion in 1989, a difference of $2.54 billion. Net

income in 1996 was also up significantly, at $245.6 million, compared to $86.5 million in

1989, a real increase of 135 percent. The combination of a much higher surplus for SWP

and the retail co-operatives affiliated with Federated Co-operatives Limited (FCL), and

the lack of a surplus figure for FCL in 1989, accounted for the extreme differences.

After adjusting for inflation, wages within the co-operative sector of the economy

appear to have fallen by 3.1 percent compared to 1989, which may be partly accounted

for by a decline in the number of people employed by

There were 1,560 active co-operatives in 1996,

an increase of 10.8 percent compared to the

1989 total. Recorded revenues in 1996 were almost

double those in the previous study, with

co-operatives generating $6.9 billion.

co-operatives. As well, legislative changes to the reporting

requirements of for-profit co-operatives following

the 1989 report have reduced access to the financial data

for some organizations, including their expenditures for

wages and benefits. These factors combine to suggest

that there actually has been an increase in wages. As a

portion of the total Saskatchewan economy, the 14,428 people employed by co-operatives

accounted for 3.2 percent of the province’s employed labour force in 1996, down from 3.5

percent in 1989. Total wage bills (salaries and benefits) for co-operatives in 1996 were $424

million—equivalent to 2.1 percent of personal incomes for the province—the same percentage

reported in 1989. The capital investment of $124 million reported in 1996 represented

2.7 percent of total new capital investment in the province, up from the 2.4 percent

reported in 1989. 4

For convenience, the financial statistics for each of the co-operative categories for

1996 are displayed in Table 3 (see facing page). These figures will be discussed in more

detail in the sections of the report that review each category individually. Unless expressly

indicated, tables comparing co-operative financial data from 1989 and 1996 may be found

following the “Sectoral Analysis,” beginning on page 86.

42 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


Table 3: Summary of the co-operative sector, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

Agricultural 408 93,348 72,209 3,071 329 124,124 4,302,615 52,176 80,011 1,334,647 828,015 318,877 0.39

Community develop. 165 1,807 1,807 2 67 158 527 (35) 0 4,258 3,180 1,076 0.77

Recreational 219 21,427 20,805 129 214 5,264 28,229 1,523 5,453 42,058 12,924 29,134 0.06

Child care and educ. 133 9,273 8,895 302 217 7,075 10,205 284 542 5,243 1,365 3,881 0.13

Retail and wholesale 192 336,415 283,415 6,108 5 129,809 1,797,136 140,558 22,030 753,415 212,082 541,334 0.16

Financial 345 620,167 569,849 3,518 85 147,174 741,386 50,742 15,528 6,993,383 6,477,054 491,330 0.94

Community service 47 30,582 30,582 201 90 9,412 14,618 368 469 6,101 1,786 4,316 0.13

Other 51 2,559 2,559 44 46 826 8,887 -4 235 54,169 49,922 4,247 0.56

Total/average 1,560 1,115,578 990,121 13,375 1,053 423,844 6,903,601 245,613 124,268 9,193,276 7,586,328 1,394,194 0.46

* Debt/Asset figures do not include extreme values Nonfinancial 0.31

Sources: See subsequent tables

Table 5: Summary of agricultural and resource co-operatives, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

Farming 36 224 224 13 15 348 3,304 683 467 4,709 2,105 2,604 0.45

Feeder 137 5,989 5,742 5 167 172 na 19 na 43,361 42,903 397 0.96

Grazing 139 1,909 1,902 2 60 200 3,265 33 57 4,013 1,609 2,404 0.31

Breeding 13 794 794 6 14 55 229 14 0 677 501 175 0.38

Seed cleaning 10 2,519 2,519 13 9 491 1,066 -125 154 1,860 473 1,387 0.24

Farmers’ markets 41 2,410 2,013 1 23 44 244 3 9 305 39 266 0.06

Soil conservation 7 201 201 0 2 4 68 25 84 128 58 70 0.09

Fishing 10 529 529 0 4 8 54 23 0 48 14 34 0.14

Sask. Wheat Pool 1 76,000 57,000 2,500 0 100,000 4,133,241 48,355 78,428 1,203,818 734,580 281,543 0.61

Dairy Producers** 1 2,000 512 516 0 22,643 159,682 3,062 529 73,248 44,251 28,998 0.60

Other agricultural 13 773 773 15 35 160 1,462 85 283 2,480 1,482 998 0.29

Total/average 408 93,348 72,209 3,071 329 124,124 4,302,615 52,176 80,011 1,334,647 828,015 318,877 0.39

* Debt/Asset figures do not include extreme values

** Amalgamated with Dairyworld Foods in 1996

Sources: Saskatchewan Department of Justice; Co-operative Secretariat, Agriculture Canada;

Saskatchewan Wheat Pool; Dairyworld Foods; 1996 annual reports of selected co-operatives


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Agricultural and Resource Co-operatives

Farmers continue to perceive co-operatives as an effective means of growing, processing,

and marketing their produce. Co-operatives categorized as agricultural

and resource include farming, feeder, grazing, breeding, seed cleaning, farmers’ markets,

fishing, Saskatchewan Wheat Pool, Saskatchewan Dairy Producers, 5 and other miscellaneous

agricultural-based organizations.

The agricultural and resource co-operatives have recently seen substantive changes

in the two largest co-operatives in this sector: Dairy Producers and Saskatchewan Wheat

Pool. In January 1996, Dairy Producers amalgamated with Dairyworld Foods to create a

single co-operative extending from Saskatchewan to British Columbia. More dramatically,

the Saskatchewan Wheat Pool became a publicly traded company in 1996, selling nonvoting

shares and thus expanding their sources of investment beyond member-producers.

There were 408 active agricultural and resource co-operatives

in 1996 compared to 345 in 1989, an increase of 18.3 percent. Active

membership fell from 74,603 to 72,209, a decline of 3.2 percent,

indicating that the average co-operative membership is declining.

Of the 408 active co-operatives, complete financial data

were collected on 279, or 68.4 percent (Table 4). As discussed

earlier, for-profit co-operatives are no longer required to submit complete financial records

to the Department of Justice in Regina. The impact of this change on data collection

was most significant among agricultural co-operatives, particularly in the categories

of farming, feeder, breeding, and fishing. Complete information was available from most,

however, including the largest co-operatives. The aggregate values, therefore, can be interpreted

with a high degree of confidence.

Revenues in 1996 were more than double

the amount reported

previously, with agricultural co-operatives

generating $4.3 billion compared to $1.8

billion in 1989.

Total assets were $1.33 billion compared to $0.81 billion in 1989, a real increase of 35.7

percent. Although liabilities increased to a greater extent, the average debt-to-asset ratio

fell from 0.46 to 0.39, indicating an overall improvement in the sector, with debt concentrated

among fewer co-operatives. The 32.1 percent decline in members’ equity (adjusted

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Table 4: Comparison of agricultural and resource co-operatives, 1989 and 1996

Descriptor 1989 1996 % Difference % Difference

(x 1000)* (x 1000)* (unadjusted) (adjusted for

inflation)

Assets $812,257 $1,334,647 64.3 35.7

Liabilities $464,421 $828,015 78.3 47.2

Average debt/asset 0.46 0.39 -15.2 na

Members’ equity $388,037 $318,877 -17.8 -32.1

Revenue $1,802,456 $4,302,615 138.7 97.2

Surplus $11,547 $52,176 351.9 273.2

Employees 3,918 3,400 -13.2 na

Wage bill $114,121 $124,124 8.8 -10.2

Capital investment $65,456 $80,011 22.2 1.0

* Except for debt/asset and number of employees

for the CPI) among agricultural co-operatives should be viewed in light of the changes

implemented by SWP, and will be discussed more fully below.

Revenues in 1996 were more than double the amount reported previously, with

agricultural co-operatives generating $4.3 billion compared to $1.8 billion in 1989. Net

income in 1996 was even more pronounced, at $52.2 million, a real increase of 273 percent.

Real wages declined by 10.2 percent compared to 1989, but after taking into account a

fall of 13.2 percent in the number of employees, the average wage actually increased

slightly.

Agricultural and resource co-operatives combined held nearly 14.5 percent of all

co-operative assets in Saskatchewan in 1996, while generating 62.3 percent of revenues

and 21.2 percent of co-operative surpluses. These co-operatives also accounted for 23.5

percent of co-operative employees, paying out 29.3 percent of all co-operative wages. The

1996 data for the different types of agricultural and resource co-operatives are provided in

Table 5 (see page 43). The figures for each type of co-operative will be discussed in detail

in the following sections of the report.

U NIVERSITY OF S ASKATCHEWAN • 45


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Farming

The roots of farming co-operatives in Saskatchewan can be traced to the mid-1940s,

when veterans returning home after the war faced the challenge of securing employment.

A government initiative facilitated the establishment of farming co-operatives for these

individuals. In 1996, Saskatchewan was home to 36 farming co-operatives, with a total

membership of 224. These numbers are down from 1989, when there were 44 co-operatives

with 234 members. Of the 36 active organizations, financial data were collected for 20.

Financial statements were a mix of 1995 and 1996 annual reports, with the total farm

receipts for 1996 being a prorated estimate based on 1995 receipts and the rate of increase

during the first three quarters of 1996. Fourth quarter results from 1996 were unavailable

when the report was being prepared.

Assets reported in 1996 totalled $4.7 million, while total liabilities were $2.1 million.

The financial health of these co-operatives appeared to improve, with the average debtto-asset

ratio decreasing from 0.67 to 0.45. Compared to the 56,995 farms operating in

Saskatchewan in 1996, 6 however, the number of co-operative enterprises remains quite

small.

Revenues reported in 1996 were $3.3 million, with a surplus of $683,000. Farming and

machinery co-operatives employed 28 individuals (13 full time and 15 part time) in 1996,

compared to 16 in 1989 (5 full time and 11 part time). Despite the low rate of response for

these co-operatives, the reported wage bill increased significantly over this period, from

$140,000 in 1989 to $348,000 in 1996. The average salary increased from $8,750 in 1989 to at

least $12,429 in 1996, an improvement of 42 percent. This increase can only partially be

explained by inflation; a greater reliance on full-time employees is another possible contributing

factor.

Feeder

The Feeder Association Loan Guarantee Program, which began in 1984, assisted farmers

with feeding and marketing their cattle. Each association was required to deposit 5 per-

46 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

cent of the funds borrowed under government loan guarantees in an assurance fund.

The 1989 study made the observation that most feeder associations in Saskatchewan were

co-operatives due to the fact that it was fairly easy to set up a co-operative as an incorporated

business, and that co-operatives received support from co-operative consultants in

Economic Diversification and Trade. 7 In 1996, there were 5,742 active members in 137

feeder co-operatives, compared to 1,040 active members in 55 co-operatives in 1989. This

represents a substantial growth in both the number of co-operatives and members in this

sector, suggesting that conditions necessary to encourage entry must have been present.

The number of members per co-operative also increased, from approximately 19 per

co-operative in 1989 to more than 41 per co-operative in 1996.

Table 6: Comparison of co-operative feeder associations, 1989 and 1996

1989 1996 % Change

Associations* 51 129 153

Loan guarantees** $13,556,000 $53,167,951 292

Number of cattle 53,651 114,591 na

Source: Loan Guarantee Program, Saskatchewan Agriculture and Food

* The number of feeder co-operatives reported by the Loan Guarantee Program is slightly different

from that reported by the Department of Justice.

** In 1989, reported as number marketed; in 1996, reported as number purchased.

The amount provided as loan guarantees has likewise increased (Table 6). In 1989, the

program identified 55 feeder co-operatives receiving total loan guarantees of just over $13.5

million. In 1996, with the number of participating feeder co-operatives having increased to

129, total loan guarantees stood at more than $53 million. Adjusting for inflation (based

on CPI), the amount of loan guarantees more than tripled between 1989 and 1996. With

the substantial increase in active membership, the average level of borrowing has declined

from $13,000 per individual member in 1989 to $9,300 in 1996. In 1989, feeders reported

marketing 53,651 cattle. This number was unavailable in 1996, but as a proxy for the level

of activity, it was noted that 114,591 cattle were purchased that year.

U NIVERSITY OF S ASKATCHEWAN • 47


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

In 1996, for the 48 feeder co-operatives reporting, assets totalled $43 million, compared

to the $17 million reported by 55 co-operatives in 1989. Liabilities increased even more,

and the average debt-to-asset ratio was 0.96 in 1996 compared to 0.83 in 1989. Generally

speaking, a feeder co-operative does not participate in the actual production of cattle for

market. The high debt-to-asset ratio and comparatively low revenues can be explained by

the function that these co-operatives were designed to facilitate—securing low-cost credit

for their memberships.

Although 1996 revenues were not available, a surplus of $19,000 was reported, compared

to a loss of $180,000 in 1989. Feeder co-operatives employed 172 individuals in 1996

(5 full time and 167 part time), compared to 65 (1 full time and 64 part time) in 1989. The

increase can be attributed more to the expansion in the number of co-operatives rather

than to any change in how these enterprises operated. The average salary paid to 65 employees

in 1989 was $1,769, compared to $2,567 paid to 67 employees in 1996. Adjusted for

the CPI, this represents a real increase of 20 percent for workers for whom a salary was

reported.

Grazing

Grazing co-operatives enable farmers to rent grazing land on a collective basis. In 1996,

there were 1,902 active members in 139 fodder and grazing co-operatives, compared to

1,376 active members in 131 co-operatives in 1989. While the number of co-operatives has

remained relatively stable, there has been a slight increase in the number of active members—more

than 13 per co-operative in 1996 compared to between 10 and 11 in 1989.

Assets totalled $4.01 million in 1996 compared to $2.95 million in 1989, and the average

debt-to-asset ratio declined from 0.45 to 0.31, indicating an improvement in the financial

health of these organizations. Combined revenues in 1996 were $3.26 million compared to

$2.41 million in 1989, with a net surplus of $32,736 in 1996 compared to $66,000 in 1989.

Fodder and grazing co-operatives employed 62 individuals in 1996 (2 full time and 60

part time), compared to 39 (2 full time and 37 part time) in 1989. The average salary paid

in 1989 was $4,974 compared to $3,226 in 1996 (a real decrease of 46.4 percent). While there

48 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

may be some question as to how individuals were designated as employees between 1989

and 1996 (at least 40 were classified as volunteers in 1996 due to their low level of remuneration),

the minimal increase in the wage bill from $194,000 in 1989 to $200,000 in 1996 (3

percent) suggests a real decline in the salaries paid by these co-operatives.

Breeding

In addition to the services provided by grazing and feeder co-operatives, livestock farmers

have also formed breeding co-operatives to supply artificial breeding services. Not as widespread

as feeder and grazing associations, breeding co-operatives in 1996 had 794 active

members in 13 organizations, 8 compared to the 1989 figures of 135 active members in 5

co-operatives. This growth in the number of co-operatives appears to include an increase

in the number of active members per co-operative. Due to the large number of members

designated as inactive in 1989 and the apparent lack of inactive members in 1996, however,

it is difficult to conclude whether there has been an increase in active members per cooperative,

or merely a change in designation criteria.

Assets totalled $677,000 for the 6 co-operatives reporting in 1996, with liabilities of

$501,000, compared to the 1989 figures of $932,000 in assets and $653,000 in liabilities.

Revenues in 1996 were $229,000, with a net surplus of $14,000, compared to 1989 revenues

of $824,000 and a surplus of $210,000. Breeding co-operatives employed 20 individuals in

1996 (6 full time and 14 part time), compared to 8 (4 full time and 4 part time) in 1989.

The 1996 wage bill for 7 employees (2 full time and 5 part time) was $55,000, as compared

to $68,000 for the 8 employees reported in 1989.

Due to the low level of reporting from this sector, it is difficult to be conclusive about

overall changes. It should be noted, however, that the average debt-to-asset ratio remained

unchanged at 0.38, and the number of breeders and levels of employment increased, suggesting

stable financial health and some growth. The decline in most values reported in

1996 is partially explained by the fact that the largest breeder co-operative in 1989, which

accounted for the majority of economic activity that year, no longer appeared to be active

in 1996.

U NIVERSITY OF S ASKATCHEWAN • 49


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Seed Cleaning

The number of seeding-cleaning co-operatives in 1996 was unchanged from 1989; the

membership, however, had increased from less than 2,078 to more than 2,500, an increase

of 21 percent. Assets totalled $1.86 million in 1996 compared to $1.8 million in 1989. The

average debt-to-asset ratio fell slightly from 0.33 to 0.24, indicating a minor improvement

in the financial health of the organizations. Members’ equity increased from $1.1 million

to $1.4 million, running just slightly ahead of the CPI. Combined revenues in 1996 were

$1.07 million compared to $0.87 million in 1989, with a net loss of $125,000 in 1996 compared

to a surplus of $29,000 in 1989.

Employment in 1996 remained relatively stable, with 22 employees (13 full time

and 9 part time), compared to 25 (15 full time and 10 part time) in 1989. The 1996 wage

bill continued to be a major cost factor, equivalent to fully 46 percent of revenues. The

average wage in 1996 was $22,318 compared to $13,640 in 1989 (a real increase of 35 percent).

Farmers’ Markets

Dispersed throughout the province, farmers’ markets provide an avenue for the direct

marketing of a wide variety of farm produce. The majority of these businesses operate on

a break-even basis, and revenues consist mainly of charges to members for co-ordination

services and table rentals. In 1996, there were 2,013 active members in 41 farmers’ market

co-operatives, compared to 2,794 active members in 48 co-operatives in 1989. The decline

in the number of co-operatives parallels the decline in the

Assets in farmers’ markets totalled

$305,225 in 1996 compared to $191,000

in 1989.

number of members participating in each one, falling from

just over 58 active members per organization in 1989 to approximately

50 in 1996.

Assets totalled $305,225 in 1996 compared to $191,000 in 1989. The average debt-toasset

ratio, already low in 1989, fell to 0.06 in 1996. Combined revenues that year were

$244,442 compared to $193,000 in 1989, with a net surplus of $3,338 as compared to $8,000

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in 1989. Although the surplus is down, all the other figures suggest continuing good financial

health for the remaining co-operatives.

Farmers’ market co-operatives employed 24 individuals in 1996 (1 full time and 23

part time), the same as in 1989. The average salary paid out in 1996 was $1,833 compared

to $1,375 in 1989 (a real increase of 11 percent), suggesting no significant change in the

operation of these businesses, although the number of co-operatives relying on volunteer

labour has declined somewhat.

Soil Conservation

In keeping with concerns about sustainable agricultural practices, a number of soilconservation

co-operatives had been established prior to the 1989 study. Of the 15 operating

in the province during 1989, 11 were located in the southern grainbelt. Five of them

reported substantial funding from the Prairie Farm Rehabilitation Administration. Soilconservation

projects included the establishment of shelter-belts, conservation tillage, and

continuous cropping.

The number of soil-conservation co-operatives filing with the

Department of Justice declined substantially between 1989 and 1996.

Only 7 were active in 1996 compared to the 15 reported in 1989. The

total membership likewise declined, from 502 to 201. Suggestions as

to why this occurred come from members of inactive co-operatives,

The average debt-to-asset ratio

of 0.09 in 1996 compared to

0.20 in 1989 indicated a lack of

debt for most soil conservation

co-operatives.

who point to a lack of interest as drought conditions abated in the 1990s. Weather is cyclical,

however, and one should be concerned that the necessary long-term work will not be

done for the next cycle of dry years. The decline in the number of co-operatives is linked

as well to the discontinuation of government programs, such as Save Our Soil and the

Greenplan, which provided much of the necessary funding.

Assets totalled $128,025 in 1996 compared to $45,000 in 1989. The average debt-to-asset

ratio of 0.09 in 1996 compared to 0.20 in 1989 indicated a lack of debt for most soil-conservation

co-operatives. In 1996, one co-operative accounted for virtually all the debt held by

U NIVERSITY OF S ASKATCHEWAN • 51


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

these organizations. Combined revenues in 1996 were $67,925 compared to $164,000 in

1989, with a net surplus of $25,060 in 1996 compared to a loss of $5,000 in 1989. Employment

in 1996 remained relatively stable and minimal, with 2 part-time employees.

Fishing

The primary service provided by the fishing co-operatives to their individual membership

is the rental of fishing equipment. All of these co-operatives, with one exception, were

located in northern Saskatchewan, with the majority operating on a break-even basis.

Fishing co-operatives declined substantially between 1989 and 1996, with 22 reporting in

the former year and only 10 in the latter. Total membership fell from 804 to 529 during

the same period.

Assets reported by 5 co-operatives in 1996 totalled $48,000, compared to $312,000 for 22

co-operatives in 1989, while the debt-to-asset ratio fell from 0.25 to 0.14. In 1996, revenues

were reported at $54,000, with a surplus of $23,000; comparable figures for 1989 were

$276,000 and $14,000. Employment declined from 13 to 4 part-time employees, with the

majority of the businesses relying on volunteer labour.

Saskatchewan Wheat Pool

Established in 1924 as a central marketing organization for grain producers, the Saskatchewan

Wheat Pool now ranks as the largest Saskatchewan-based corporation. The SWP

also ranks as Canada’s largest grain-handling company, dealing with more than 57 percent

of all grain delivered in Saskatchewan and more than 31 percent of all grain delivered on

the prairies. This activity, however, represents only one of the many enterprises in which

this large and diverse company is involved. While grain handling accounted for 33 percent

of SWP operating earnings in 1996, fully 45 percent of earnings came from the farm supply

segment, with an additional 22 percent derived from agri-food processing, livestock marketing,

and publishing. 9

Selected Pool activities from 1989 to 1996 are outlined in Table 7. Most notable is the

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sustained growth in farm supplies since 1989, an area of sales that had been relatively flat

during the last half of the 1980s. 10 The sudden jump in livestock handling reflects the

merger with Manitoba Pool Elevators’ livestock facilities in 1994.

Table 7: Sales and operating revenues by segment (x 1000)

1996 1995 1994 1993 1992 1991 1990 1989

Country Services

grain managed (tonnes) 9,300 10,559 10,313 10,376 11,332 11,300 9,195 6,423

Terminal elevator

grain handling (tonnes) 4,700 6,641 5,919 5,743 7,560 7,682 7,174 5,832

Country Services

farm supply sales ($) 379,600 314,516 266,662 207,140 196,429 178,444 186,555 184,011

CSP Foods

flour sales (tonnes) na 95 100 85 84 79 71 70

Livestock handlings

(head) 792 812 517 521 492 474 460 422

Western Producer

circulation 99 96 97 100 107 126 131 135

Source: SWP Annual Reports (1996, 1995, and 1990).

In 1996, SWP commercial operations included: the grain handling and marketing

segment (the grain operations of Country Services, Marketing and Transportation, and

Terminal Elevator divisions, plus interest in AgPro Grain Inc., Pacific Elevators Ltd.,

Prince Rupert Grain Ltd., and XCAN Grain Pool Ltd.); the farm supplies segment (Pool

Farm Supplies and affiliated Western Co-operative Fertilizers Limited); the agri-food

processing segment (CSP Foods, company interests in CanAmera Foods, Prairie Malt

Limited, Pound-Maker Agventures Ltd., and Robin’s Foods Inc.); the livestock segment

(Heartland Livestock Services and affiliated Burnt Lake Livestock Mart Ltd., Medicine

Hat Feeding Company (1994), and Saskatoon Livestock Sales); and the publishing segment

(Western Producer Publications and affiliated PrintWest Communications Ltd.). 11

The Saskatchewan Wheat Pool underwent a significant change in its ownership structure

in 1996, which allowed the corporation to be listed as a publicly traded company and

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

The dramatic differences in the figures illustrate

vastly improved market conditions

for grain sales worldwide, and the

capacity of Saskatchewan producers and

SWP to meet that demand.

to issue Class B nonvoting shares for the first time. In 1996, there were approximately

57,000 voting members in SWP, compared to an active membership of 64,348 in 1989. The

decline in membership is partially a consequence of the new corporate ownership, as well

as the ongoing concentration of agrarian production.

Assets totalled $1.2 billion in 1996 compared to $0.67 billion

in 1989. Adjusted for inflation, this represents a real increase

of 47.3 percent in the company’s assets. Liabilities have

also increased substantially since 1989, rising from $383 million

to $735 million. As a result, the debt-to-asset ratio has increased

from 0.57 to 0.61. Shareholder equity has increased as

well, but only a portion of this was held by the voting shareholders

(members). Members’ equity was calculated at $282 million in 1996, 12 compared to

$444 million in 1995 and $330 million in 1989. Although the figures for members’ equity

were based on a conservative estimate of the portion of Class B shares held by producers,

the decline is reflective of the decision by a number of members to withdraw their equity

from SWP at the time of its conversion to a publicly traded company. Revenues in 1996

were $4.13 billion compared to $1.59 billion in 1989, while the net surplus during the same

period was $48 million as compared to $5 million. The dramatic differences in the revenue

and surplus figures illustrate vastly improved market conditions for grain sales worldwide,

and the capacity of Saskatchewan producers and SWP to meet that demand.

The SWP provided 2,500 full-time equivalent (FTE) positions in 1996, a drop of 16.7

percent from 1989. The wage bill was $100 million in 1996 compared to $88 million in

1989. Adjusting for the reduced size of the workforce, average salaries increased from

$29,309 to $40,000. And taking into account the change in the CPI, this represented a 12.7

percent increase in the average salary.

Saskatchewan Dairy Producers

The origins of Saskatchewan Dairy Producers can be traced to the establishment of a

number of creameries during the 1890s. Dairy Producers was established in 1972 as the

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S ECTORAL A NALYSIS •

result of a merger between two co-operatives—Saskatchewan Co-operative Creameries

Association and the Dairy Pool. 13 After that amalgamation, Dairy Producers handled the

majority of Saskatchewan milk and cream shipments. In 1989, Dairy Producers owned

11 processing branches and 13 sales depots in various centres throughout the province.

Milk and milk products made up the largest proportion of sales; other products included

poultry, eggs, and juice.

In 1996, Dairy Producers amalgamated with Dairyworld Foods, now the largest food

company in western Canada, with annual milk production of more than 1 billion litres

and sales approaching $1.2 billion. 14 The merger has allowed Dairyworld to position itself

as a major national and international competitor. The rationalization occurring within the

processing portion of the milk industry is evident by the changes in the financial statistics

collected in 1996 compared to those from 1989 (see table on page 90). In addition, active

and total membership in the co-operative have both declined since 1989, indicating that

rationalization is also occurring within the production side of the industry. In 1989, total

membership was 4,572, with an active

membership of 1,601 producers. By

1996, total membership had dwindled

to about 2,000, and active membership

was down to 512 producers.

In 1996, Dairy Producers amalgamated with Dairyworld Foods, now the

largest food company in western Canada. The mer-ger has allowed

Dairyworld to position itself as a major national and international competitor.

Saskatchewan assets in 1996 were calculated at $73 million compared to $101 million

in 1989. The decline is due in large part to the process of amalgamation and the elimination

of 8 out of 12 facilities formerly operated by Dairy Producers within the province.

Liabilities declined only slightly, falling from $50 million in 1989 to $44 million in 1996,

resulting in an increase in the debt-to-asset ratio from 0.50 to 0.60. Members’ equity

within Saskatchewan has also fallen. In 1996, it was reported as $29 million, which was

down substantially from the $51 million reported in 1989. Revenues in 1996 were $160

million compared to $181 million in 1989, and the surplus in 1996 was also lower, at $3

million compared to $4.7 million in 1989.

Reflective of the rationalization occurring within the new co-operative entity, the

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

number of employees in 1996 was 516 compared to 683 in 1989. The wage bill in 1996 was

also lower, at $22.6 million. A comparison of average salaries, however, showed wages of

$36,649 in 1989 compared to $43,882 in 1996. Adjusted for the CPI, the average wage was

virtually unchanged, declining by just over 1 percent. Capital investment saw the most

dramatic decline of all the financial indices that were compared, falling by 98 percent,

from $34 million in 1989 to $529,000 in 1996, as Dairyworld Foods divested itself of redundant

assets.

Other Agricultural Co-operatives

The 13 co-operatives included in this category represent a wide variety of enterprises,

including wild rice producers, organic growers, a greenhouse, Christmas tree growers,

pheasant and rabbit producers, as well as livestock and sheep marketers. While the number

of co-operatives is unchanged from 1989, total membership has declined from 1,390

to 773. Incomplete data collection makes comparisons difficult, but for the 7 reporting

their financial information in 1996, the average debt-to-asset ratio declined from 0.35 to

0.29. At the same time, the number of employees has increased from 42 in 1989 (4 full

time and 38 part time) to 50 in 1996 (15 full time and 35 part time).

Community Development Co-operatives

The Small Business Loans Associations (SBLAs) and Rural Development Corporations

(RDCs), which comprise the two types of co-operatives found within the

community development sector, were first initiated in the 1980s to address Saskatchewan’s

dependence on agricultural exports. 15

The number of community development co-operatives increased from 41 in 1989 to

165 by 1996. Comparison of the financial statistics, however, produced conflicting trends

(Table 8). Although assets kept pace with growth in the number of co-operatives, revenues

declined, and an overall loss of $35,000 was recorded in 1996, compared to a surplus of

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S ECTORAL A NALYSIS •

$135,000 in 1989. The number of employees almost doubled, but wages did not increase as

significantly. A closer examination revealed that the vast majority of the jobs in 1996 were

part time (67 of 69), while one-quarter (9 of 39) were full time in 1989.

The financial statistics collected for the two types of community development cooperatives

for 1996 are presented in Table 9 (see overleaf). The mixed results found when

comparing 1989 and 1996 data can be explained by the divergence in the evolution of the

two organizations since 1989.

Table 8: Comparison of community development co-operatives, 1989 and 1996

Descriptor 1989 1996 % Difference % Difference

(x 1000)* (x 1000)* (unadjusted) (adjusted for

inflation)

Assets $1,047 $4,258 306.7 235.9

Liabilities $404 $3,180 687.1 550.2

Average debt/asset 0.49 0.77 57.1 na

Members’ equity $642 $1,076 67.6 38.4

Revenue $749 $527 -29.6 -41.9

Surplus $135 -$35 -125.9 -121.4

Employees 39 69 76.9 na

Wage bill $126 $158 25.4 3.6

Capital investment $1 $0 -100.0 -100.0

* Except for debt/asset and number of employees

Small Business Loans Associations

This program, administered by Saskatchewan Economic and Co-operative Development,

enables individuals or businesses to form Small Business Loans Associations (SBLAs),

which raise investment capital to establish new businesses in their communities. The

number of SBLAs has grown rapidly since the program began in May 1989. During the

first few months, numbers were quite small (27), reflecting the novelty of this type of

enterprise, but by 1990, the number had grown to 89, and in 1996, the number of active

co-operative SBLAs stood at 147.

U NIVERSITY OF S ASKATCHEWAN • 57


Table 9: Summary of community development co-operatives, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

SBLA 147 1,672 1,672 0 59 60 294 -8 0 3,233 2,743 487 0.81

RDC 18 135 135 2 8 98 233 -27 0 1,025 437 589 0.42

Total/average 165 1,807 1,807 2 67 158 527 -35 0 4,258 3,180 1,076 0.77

* Debt/Asset figures do not include extreme values

Source: Saskatchewan Department of Justice, Annual Returns

Table 12: Summary of recreational co-operatives, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

Community halls 109 7,459 6,955 0 34 63 862 -15 27 3,149 22 3,127 0.01

Curling/rec centres 95 11,466 11,348 12 108 673 2,931 1 88 10,786 1,220 9,566 0.10

Television 5 1,734 1,734 117 57 4,472 24,051 1,491 5,328 27,378 11,459 15,919 0.23

Other recreation 10 768 768 0 15 56 385 46 10 745 223 522 0.09

Total/average 219 21,427 20,805 129 214 5,264 28,229 1,523 5,453 42,058 12,924 29,134 0.06

* Debt/Asset figures do not include extreme values

Sources: Saskatchewan Department of Justice, Annual Returns; Regina Cablevision

Table 14: Summary of child-care and preschool co-operatives, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

Child care 54 3,436 3,106 269 118 6,297 8,899 240 385 4,561 1,228 3,336 0.26

Preschool 79 5,837 5,789 33 99 778 1,306 43 156 682 137 545 0.04

Total/average 133 9,273 8,895 302 217 7,075 10,205 284 542 5,243 1,365 3,881 0.13

* Debt/Asset figures do not include extreme values

Source: Saskatchewan Department of Justice, Annual Returns


S ECTORAL A NALYSIS •

Assets held by SBLA co-operatives rose from $107,000 in 1989 to $3.2 million in 1996.

While liabilities have also increased, the average debt-to-asset ratio fell slightly, from 0.83

to 0.81. Compared to 1989, when there were no positions recorded, SBLAs employed 59

part-time workers in 1996, primarily in bookkeeping and administrative positions. The

average wage bill of just over $1,000 per employee reflects the limited roles required.

In 1990, 70 percent of new SBLAs were organized as co-operatives. They secured

461 clients and approved loans worth $2 million. Spin-off benefits from SBLA activity

included the creation of 194 new jobs and the maintenance of 141 of them. 16 By 1996, the

proportion of SBLAs organized as co-operatives had fallen to 60 percent, despite nearly

doubling their numbers (Table 10). In 1990, the majority of jobs were created and maintained

by private SBLAs; but by 1996, the co-operatives accounted for a share more proportional

to their share of loans and number of SBLAs. The total loan amounts approved

for co-operatives in 1996 was $1.75 million, down from the $2.04 million approved in the

first ten months of 1990.

Table 10: Comparison of co-operative and private SBLAs, 1996

Type Number Number Jobs Jobs Amount

of SBLAs of Loans Created Maintained Approved

(x $1,000)

Co-operatives 171* 372 390 488 1,754

Private 114 224 262 201 1,041

Total 285 596 652 689 2,795

* This number is different from that recorded in both the summary and comparative tables due to different sources

using different criteria for reporting.

Source: Saskatchewan Economic and Co-operative Development

The successful introduction of the co-operative SBLA appears to be concentrated more

in rural areas, where there may be greater opportunity to build on established relationships.

The high debt-to-asset ratio is indicative of the primary purpose of the SBLA—to

provide government-sponsored funding as loans to its members. Opportunities for the

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

SBLAs to build equity are limited, as the equity is derived from loan interest and administration

fees, which are kept low to provide more immediate benefit to the SBLA members,

who are also the co-operatives’ customers.

Rural Development Corporations

The role of Rural Development Corporations has been to assist member organizations

with the identification, promotion, and implementation of development projects in rural

areas. 17 In 1989, more than 100 communities and municipalities belonged to 14 co-operative

RDCs. By 1990, the number of co-operative RDCs had increased to 19, accounting for

65 percent of the 29 RDCs in the province.

While there were more co-operative RDCs in 1996 as compared to 1989, there was no

net increase in the number since 1990. Assets were relatively unchanged from 1989, but

liabilities increased to the point that total members’ equity fell from $632,000 in 1989 to

$588,787 in 1996. Revenues also experienced a decline—from $742,000 to $233,000—and

a loss of $27,000 was recorded for 1996. In addition, the number of salaried positions fell

from 39 to 10, despite the increased number of RDCs, and total wages paid out fell from

$126,000 in 1989 to $98,000 in 1996.

The lack of growth and reduced revenues among the RDCs can be explained by their

declining role in economic development. The RDCs are in the process of being replaced

by Regional Economic Development Authorities (REDAs), which are voluntary, community-owned

organizations designed to assist regional development. In 1996, there were

22 operating in the province as nonprofit organizations. Although the REDAs generally

function as co-operatives, maintaining the principle of one member one vote, a formal

co-operative structure has not been possible. Organizational characteristics, including

the fact that directors are appointed rather than elected from the membership, preclude

the REDAs from conforming with Department of Justice requirements for co-operative

incorporation.

Many RDCs have served as the mechanism by which the REDAs have been estab-

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S ECTORAL A NALYSIS •

lished, the final act of the RDC being to transfer its resources to the REDA prior to

dissolving the enterprise. It can be expected that most, if not all, RDCs, will eventually

disappear as they give way to the REDAs. Some will remain in a limited capacity, while

others will continue in their present form, merely using the REDA as an instrument to

co-ordinate activities between member RDCs.

Recreational Co-operatives

Recreational co-operatives have been established in rural Saskatchewan since the early

1920s. 18 Residents of the province are presently active in a wide variety of recreational

co-operatives including community halls, curling rinks and recreation centres, television

services, golfcourses, and community theatres. Community-based recreational facilities,

in addition to providing valuable services, also play an essential role in fostering a sense of

community spirit, which is a critical component of successful community development.

Recreational co-operatives therefore provide indirect support for the kinds of communitydevelopment

projects described in the previous section.

Table 11: Comparison of recreational co-operatives, 1989 and 1996.

Descriptor 1989 1996 % Difference % Difference

(x 1000)* (x 1000)* (unadjusted) (adjusted for

inflation)

Assets $34,534 $42,058 21.8 6.0

Liabilities $15,674 $12,924 -17.5 -31.9

Average debt/asset 0.06 0.06 0.0 na

Members’ equity $18,860 $29,134 54.5 27.6

Revenue $16,478 $28,229 71.3 41.5

Surplus $1,933 $1,523 -21.2 -34.9

Employees 327 343 4.9 na

Wage bill $2,643 $5,264 99.2 64.5

Capital investment $7,049 $5,453 -22.6 -36.1

* Except for debt/asset and number of employees

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A number of community-based recreational facilities are owned and controlled on

a co-operative basis, but are not registered as such; hence, figures for this category are

underestimated. In addition, the financial data do not reflect the value of donated materials

and volunteer labour that have been invested in establishing and maintaining

these facilities.

Unlike those co-operative sectors already discussed, the recreational co-operatives

experienced a substantial (17.7 percent) decline in their numbers, from 266 in 1989 to

219 in 1996. Active membership increased from 17,459 in 1989 to 20,805 in 1996, but total

membership fell from 27,119 to 21,427.

Total assets reported by this sector have increased somewhat despite the decrease in

numbers, and liabilities have declined substantially (Table 11). The average debt-to-asset

ratio remains low and unchanged from 1989, suggesting good financial health for those

co-operatives still active. The large increase in revenues appears to be offset by higher

expenses, with the 1996 surplus much lower (21 percent) than that reported in 1989.

Employment increased between 1989 and 1996, with a substantially larger wage bill reported,

while capital investment fell from $7.05 million in 1989 to $5.45 million in 1996.

The 1996 financial statistics for each type of recreational co-operative are found in Table

12 (see page 58).

Community Halls

Since 1989, there has been a marked decline in the number of community halls operating

as co-operatives. Compared to 1989, when there were 145 of them, there are now only 109

registered. Despite the 25 percent decline, however, the total active membership over the

period increased from 6,113 to 6,955, although total registered membership fell from 11,071

to 7,459 (a decrease of 32.6 percent), suggesting either a change in the recording of some

memberships or possibly the elimination of inactive members from many co-operative

rolls. The financial statistics suggest a shrinking, rather than a growing, membership.

Considering the decline in the number of co-operatives, it is interesting to note that

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S ECTORAL A NALYSIS •

Communities with Community Hall

Co-operatives

+ All Other Communities

Saskatoon

Regina

Figure 1: Location of community hall co-operatives in Saskatchewan, 1996

Source: Saskatchewan Department of Justice, Annual Returns

assets and members’ equity remained fairly constant over the period. Declining total

revenue was a feature of the community hall co-operatives, with average individual cooperative

revenues increasing by only 16.7 percent over the 7-year period (less than the

CPI). As in 1989, the level of debt among community halls was extremely low in 1996, but

this may merely reflect a lack of capital investment, which was $26,663 in 1996 as compared

to $79,000 in 1989.

Curling and Recreational Centres

Curling and recreational facilities serve a wide variety of needs, providing gymnasiums,

meeting halls, hockey arenas, swimming pools, concession stands, and many other services.

Unlike the community halls, the number of curling rinks and recreational centres,

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

and their corresponding membership, held relatively steady between 1989 and 1996. The

number of co-ops fell from 101 to 95, and total membership fell from 12,432 to 11,466.

Assets were slightly higher in 1996 compared to 1989 (unadjusted), although there

was a 9 percent decline in revenues. These organizations continue to enjoy a low debtto-asset

ratio, and members’ equity increased from $8.3 million in 1989 to $9.6 million

in 1996.

The level of employment provided by these co-operatives was virtually unchanged,

with 12 individuals employed full time and 108 part time in 1996 (for a total of 120),

compared to 11 full time and 106 part time in 1989 (for a total of 117). The total 1989

wage bill was $528,000 compared to $673,000 in 1996, an increase of 5 percent after adjusting

for the CPI. Capital investment was markedly down in 1996, at $88,000 compared to

$639,000 in 1989.

Television

People are co-operating in Saskatchewan to provide themselves with cable television

services. The number of television co-operatives declined by 2 from 1989, leaving a total

of 5 in 1996. Despite their small number, however, television co-operatives are responsible

for a considerable amount of economic activity. The number of employees (including

40 contract positions) was 174 in 1996 compared to 117 in 1989, with an average salary of

$25,701 in 1996 compared to $16,000 in 1989. And although capital investment was lower

—$5.3 million in 1996 compared to $6.3 million in 1989—there was a marked increase in

assets, with more than $27 million in 1996 compared to less than $20 million in the earlier

study.

Other Recreation

In 1996, there were 10 active co-operatives in this sector, including golf, community

theatre, museums, and waterslides. The number of co-operatives categorized as “other”

has declined from 13 in 1989, with a corresponding decline in total membership. More

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S ECTORAL A NALYSIS •

striking is the decline in the number of individuals employed. In 1989, these co-operatives

employed 42 people (13 full time and 29 part time). In 1996, this number had fallen to 15

and all positions were part time. Most of this lost employment can be attributed to two

co-operatives that no longer reported in 1996. Predictably, the total wage bill declined as

well, decreasing from $180,782 to $56,252. These co-operatives appear to be financially

healthy, with most reporting surpluses in 1996 and very low levels of debt in relation

to assets.

Child-Care and Preschool Co-operatives

The trend toward more women working outside the home has heightened the need

for adequate and affordable child-care services. Co-operatives can play an important

role in this regard. While private firms may be inclined to enhance profitability by

charging higher prices, member-owned child-care and educational facilities are more

likely to place emphasis on providing more spaces at prices that members can afford,

which suggests an opportunity for this type of co-operative to become more common.

Compared to the 120 co-operatives in this sector in 1989, however, the 11 percent expansion

to 133 in 1996 appears somewhat modest. The size of the membership has not

changed to any great extent, although active membership actually declined from 9,975

to 8,895.

Assets increased from $3.8 million in 1989 to $5.2 million in 1996 (Table 13a). Adjusted

for the CPI, this represents a real increase of 14.3 percent. Declining levels of debt and

the low average debt-to-asset ratio indicated good financial health for these co-operatives.

While both the total revenue and surplus for the sector exceeded figures reported in 1989,

the increase was less than the rate of growth over this period. This may suggest that cooperatives

are keeping fees down as a benefit to the membership.

Despite the continued financial health of this sector, one stakeholder group does not

appear to have benefited to the extent one might expect. While capital investment and the

size of the labour force has kept pace with the growth in the number of co-operatives, real

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

wages appear to be declining. Adjusted for the CPI, wages have fallen 3 percent since

1989, which may be explained by the increased percentage of part-time staff (from 34.4

percent to 41.8 percent) and an actual decline in the number of full-time employees from

310 to 302. The 1996 financial statistics for both the child-care and preschool co-operatives

appear in Table 14 (see page 58).

Table 13a: Comparison of child-care and preschool co-operatives, 1989 and 1996

Descriptor 1989 1996 % Difference % Difference

(x 1000)* (x 1000)* (unadjusted) (adjusted for

inflation)

Assets $3,788 $5,243 38.4 14.3

Liabilities $1,282 $1,365 6.5 -12.1

Average debt/asset 0.14 0.13 -7.1 na

Members’ equity $2,506 $3,881 54.9 27.9

Revenue $8,119 $10,205 25.7 3.8

Surplus $230 $284 23.0 1.6

Employees 473 519 9.7 na

Wage bill $6,021 $7,075 17.5 -3.0

Capital investment $406 $542 33.3 10.0

* Except for debt/asset and number of employees

Child-Care Centres

The number of child-care centres reporting to the Department of Justice increased

from 45 in 1989 to 54 in 1996. Accompanying this increase was a corresponding increase

in total assets, members’ equity, revenues, and surplus. A 5 percent decline in the wage

bill (adjusted for the CPI) may reflect the greater reliance on part-time employees noted

earlier. In 1989, there were 279 full-time and 88 part-time positions. Despite the addition

of 9 more co-operatives, full-time positions declined to 269, while part-time positions increased

to 118. This may be due to increased competition from the nonprofit child-care

centres, which have doubled in number since 1989. As further evidence of restrictions on

wage costs, the wage bill in 1989 was equivalent to 75.6 percent of revenues, whereas in

1996, it was down to 70.8 percent.

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Table 13b provides a comparison among co-operative, nonprofit, and private childcare

facilities in 1996. Unlike 1989, when more than half of the 94 child-care facilities

were organized as co-operatives, only 48 of 131 centres (37 percent) registered with Social

Services in 1996 were co-operatives. While the number of co-operatives has remained

relatively unchanged, the number of nonprofit child-care centres, as mentioned above,

has nearly doubled, suggesting that while the demand for these services is growing, the

conditions necessary to support the use of a co-operative model may be lacking.

Table 13b: Comparison of co-op, nonprofit, and private child-care facilities, 1996

Type Facilities Spaces Operating Wage

Grants Grants

(x $1,000) (x $1,000)

Co-operatives* 48 2,082 968 409

Nonprofit** 81 2,773 755 578

Private 2 22 na na

Total 131 4,877 1,723 987

Source: Saskatchewan Social Services

* The number of child-care co-operatives listed here does not match the number reporting to the Department

of Justice in 1996 because of different sources of information.

** Eight of the nonprofit corporations receive no funding from Social Services.

Preschools 19

In contrast to child-care facilities, preschools do not receive a high level of government

funding. As a result, they tend to rely more heavily on donations and fundraising drives

to bolster revenues. Preschools recorded proportionately less financial activity than the

child-care facilities. This is probably a reflection of their smaller size and a greater reliance

on volunteer labour.

There were 79 active preschools in 1996 compared to 75 in 1989. While the membership

declined over the period from 6,738 to 5,837, in every other respect these co-operatives

appeared to be in good financial health. Assets have almost doubled, from $365,000 in 1989

to $681,757 in 1996. The average debt-to-asset ratio remains very low, at 0.04, and although

there was a significant increase in capital investment—$156,362 in 1996 compared to

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Communities with Child-

Care Co-operatives

+ All Other Communities

Figure 2: Location of child-care co-operatives in Saskatchewan, 1996

Source: Saskatchewan Department of Justice, Annual Returns

Communities with Preschool

Co-operatives

+ All Other Communities

Figure 3: Location of preschool co-operatives in Saskatchewan, 1996

Source: Saskatchewan Department of Justice, Annual Returns

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S ECTORAL A NALYSIS •

$19,000 in 1989—most of this can be attributed to a major expansion carried out by one

preschool co-operative.

Total revenues of $1.3 million in 1996 compares favourably with $0.9 million in 1989.

The total surplus for 1996, however, fell to $43,000 from the $68,000 reported in 1989. At

the same time, the number of employees, both full time and part time, increased by 24.5

percent, from 106 positions in 1989 to 132 in 1996. The wage bill (adjusted for the CPI)

increased 17.7 percent, from $546,000 to $778,000.

Retail and Wholesale Co-operatives

Consumer co-operative activity first appeared on the prairies at the turn of the

century. Agricultural producers joined together to form buying clubs in order to

make bulk purchases of farm supplies and basic commodities. 20 These initial forms of

co-operative activity have grown into an extensive retailing system. Virtually all economic

activity in this sector was carried out by Federated Co-operatives Limited (FCL) and the

affiliated retail co-operatives. For this reason, an aggregate comparison of the sector between

1989 and 1996 will not be carried out. Comparisons will be made instead based on

the three co-operative designations within the sector: FCL, Affiliated Retail, and Other

Retail co-operatives. The 1996 financial statistics for FCL, Affiliated Retails, and Other

Retails are displayed in Table 15 (see overleaf).

Federated Co-operatives Limited and Affiliated Retails

According to Saskatchewan Business magazine, Federated Co-operatives Limited is

Saskatchewan’s second largest corporation in terms of gross sales. Experiencing a pattern

of steady growth since the 1989 study, FCL reported record sales of $2.2 billion and savings

of $133 million for the entire Co-operative Retailing System in 1996. 21 Divisions within

FCL are representative of the types of retail co-operatives it serves, including retail operations,

consumer products, agricultural products, distribution, forest products, refining,

and environmental and technical services. FCL is a transprovincial co-operative, but the

U NIVERSITY OF S ASKATCHEWAN • 69


Table 15: Summary of retail and wholesale co-operatives, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

FCL 1 [169] [169] 1,148 0 50,063 863,302 60,829 17,139 442,445 143,672 135,430 0.32

Affiliated retail 169 335,000 282,000 4,960 0 79,735 933,730 79,735 4,891 474,233 68,365 405,868 0.14

Other retail 22 1,415 1,415 0 5 11 104 -6 0 80 45 36 0.33

Total/average 192 336,415 283,415 6,108 5 129,809 1,797,136 140,558 22,030 916,758 212,082 541,334 0.16

Some FCL assets also counted as Retail Equity: reduced total assets by $163 million, resulting in total assets of 753,415

* Debt/Asset figures do not include extreme values

[ ] indicates that members are other co-operatives

Sources: Federated Co-operatives Limited; Saskatchewan

Department of Justice, Annual Returns

Table 16: Summary of financial co-operatives, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

Credit unions (163) 340 555,188 555,188 2,556 0 92,033 480,361 40,088 11,199 6,106,584 5,745,655 360,929 0.94

Credit Union Central 1 [376] [376] 275 85 20,495 125,668 4,022 3,741 1,616,954 1,531,483 85,471 0.95

Co-operative Trust 1 [148] [148] 180 0 9,310 44,002 2,230 580 487,236 463,676 23,560 0.95

The Co-operators 1 [3] [3] 500 0 25,000 65,000 3,000 0 170,000 145,000 1 0.85

Co-op Hail Insurance 1 64,884 14,566 7 0 337 26,354 1,402 8 25,579 4,211 21,368 0.16

Other financial 1 95 95 0 0 0 0 0 0 2 1 1 0.45

Total/average 345 620,167 569,849 3,518 85 147,174 741,386 50,742 15,528 8,406,355 7,890,026 491,330 0.94

Total assets and liabilities are reduced by $1.413 million, as these amounts are reported by both CUC and Credit Unions 6,993,383 6,477,054

* Debt/Asset figures do not include extreme values

[ ] indicates that members are other co-operatives

Sources: Credit Union Central; Co-operative Trust; The Co-operators;

Co-op Hail Insurance; Saskatchewan Department of Justice, Annual Returns


S ECTORAL A NALYSIS •

figures reported in this study reflect only that portion of the enterprise deemed to be

owned or operating within Saskatchewan. As well, $163 million of FCL members’ equity

represents assets of the affiliated retail co-operatives within Saskatchewan. 22

In 1996, FCL assets in Saskatchewan were estimated to be $442 million, or 50 percent

of the organization’s total assets of $885 million. 23 With Saskatchewan-based liabilities

estimated at $144 million, the debt-to-asset ratio in 1996 was 0.32, only slightly higher than

the value (0.29) calculated in 1989. Members’ equity, after subtracting equity also reported

as assets by individual retail affiliates, was $135 million in 1996.

Revenues and surpluses generated from sales to Saskatchewan retail co-operatives were

$863 million and $61 million respectively. In 1996, FCL employed 1,148 people compared

to 1,183 in 1989, a 3 percent decline. The total wage bill in 1996 was $50 million compared

to $44.5 million in 1989, a decline of 7 percent when adjusted for the Saskatchewan CPI.

Over the same period, capital investment increased from less than $14.5 million to more

than $17 million. When adjusted for the CPI, however, capital investment was down

slightly from 1989.

The 169 retail co-operatives affiliated through FCL delivered a wide variety of goods

and services throughout the province, with particular concentration in small rural communities.

24 Merchandise provided by the retail co-operatives included groceries, general

merchandise, petroleum products, feed, and crop supplies.

Although the number of affiliated retails and active membership experienced a slight

decline (4 percent and 2 percent respectively), assets increased by 34 percent (unadjusted)

to $474 million in 1996. Combined with a 44 percent decline in liabilities, this resulted in

a 74 percent increase in members’ equity, recorded at $406 million in 1996 compared to

$233 million in 1989.

The affiliated retails recorded revenues just under $1 billion, which represented 13.1

percent of all retail sales in Saskatchewan in 1996, 25 down slightly from 13.6 percent in

1989. A surplus of nearly $80 million in 1996 represented an increase of 87.9 percent compared

to 1989 (adjusted for the CPI). The overall wage bill appeared to hold steady during

U NIVERSITY OF S ASKATCHEWAN • 71


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

the period. An increase of 14 percent in total wages paid combined with an 8 percent

decline in the number of employees resulted in an average salary of $16,076, a real increase

of 2.4 percent compared to 1989.

Other Retail Co-operatives

Including such diverse enterprises as a bookstore, laundromat, restaurants, and buying

clubs, these 22 co-operatives held assets in excess of $80,000 and members’ equity in excess

of $36,000 for their 1,400 members. Revenues totalled $103,538 in 1996, with a small loss

reported. Reflecting the small size of most of these miscellaneous retail co-operatives, only

5 part-time employees were identified, with a total wage bill of $11,382. Capital investment

was practically nonexistent. The lack of financial data for nearly half the co-operatives in

1996 made comparisons difficult. Based on those who did report, however, the average

debt-to-asset ratio was 0.33 in 1996 compared to 0.53 in 1989.

Communities with Retail

Co-operatives

+ All Other Communities

Figure 4: Location of retail co-operatives in Saskatchewan, 1996

Source: Saskatchewan Department of Justice, Annual Returns

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S ECTORAL A NALYSIS •

Financial Co-operatives 26

Alack of financial services on the prairies during the depression led to the establishment

of the co-operative financial sector. During the 1930s, the number of bank

branches in Saskatchewan declined by 40 percent. The banks were also accused of setting

high interest rates and operating conservative loan policies, factors that led to a determination

to develop locally based and locally responsive financial institutions. 27

The financial co-operatives reported in this study include the credit unions and Credit

Union Central, the Co-operative Trust Company of Canada, The Co-operators, and Cooperative

Hail Insurance. The 1996 financial statistics for these co-operatives are contained

in Table 16 (see page 70). Due to the fact that there is only one “other financial co-operative”

in 1996, and that it was very small, it has been included in Table 16 for completeness,

but will not be discussed further.

Active membership for the financial co-operatives (excluding corporate and organizational

memberships) was 569,849 in 1996 compared to 583,559 in 1989, a decline of 2.3

percent. Assets in 1996 were $6.99 billion, with liabilities accounting for $6.48 billion. The

average debt-to-asset ratio was 0.94 and members’ equity totalled $491 million.

The Credit Union System and Credit Union Central

The first credit union was organized in Lafleche in 1937, consisting of 12 members and

$52.50 in assets. 28 By 1989, the credit union system in Saskatchewan had grown to include

351 credit union outlets and almost $5 billion in assets. Local ownership and control

combined with the establishment of a large, province-wide, central organization allowed

members to take advantage of the efficiencies provided by economies of scale while maintaining

responsiveness to local needs. Firms that were locally owned and controlled could

continue to provide services in communities where it was no longer profitable for a private

firm to do so. Local ownership also meant that the money deposited locally was more

likely to remain in the community.

Originally established around a rural population with limited mobility, the credit

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Table 17: Distribution of credit unions and selected chartered banks in Saskatchewan, 1996

Functional Categories*

Minimum Full Partial Complete Secondary Primary

Convenience Convenience Shopping Shopping Wholesale Wholesale

Number of

Communities 500 59 22 7 8 2

CIBC 17 21 8 4 11 16

Royal Bank 13 18 11 7 10 18

Credit Unions 185 53 22 7 17 32

*Based on classifications in Jack Stabler and Rose Olfert, The Changing Role of Rural Communities in an Urbanizing

World: Saskatchewan—An Update to 1995 (Canadian Plains Research Center, University of Regina, 1996). These

communities were chosen based on a certain set of criteria. They had to be south of the census 18 divisional border

(as drawn in 1981), have a population of more than 50 in 1961, and be included in the 1981 census. There are

currently fourteen additional communities in Saskatchewan that have credit unions or credit union branches, which

do not meet the criteria laid out by Olfert and Stabler. The CIBC also has one branch in a community not included

in the above functional categories.

unions are now undergoing a consolidation process common to many institutions within

the province. Trends toward greater urbanization and reduced economic activity in the

smaller towns and villages have heightened the need for the reinvestment of savings back

into the community. And the globalization of financial services finds the credit unions

increasingly in competition with the traditional banking system, as well as other financial

institutions. 29

In 1996, 340 credit union locations representing 163 credit unions reported assets

totalling $6.1 billion compared to just under $5 billion in 1989. Over the same period, liabilities

increased from $4.8 billion to more than $5.7 billion, and the average debt-to-asset

ratio declined somewhat, from 0.96 to 0.94. Members’ equity grew from $194* million to

$361 million, an increase of 53 percent after adjusting for the CPI.

In 1996, credit union revenues were $480 million, with a surplus of $40 million.

The system employed 2,556 individuals and reported a wage bill of more than $92

million. Capital investment was calculated at $11.2 million compared to an estimated

$8.9 million in 1989. 30

* This figure differs from the 1989 report due to different methods of making the original calculation.

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S ECTORAL A NALYSIS •

The credit unions own Credit Union Central (CUC), which serves the system by

providing financial services, information technology support, and consulting services.

As part of its efforts to support the credit unions, CUC has developed a number of

alliances and partnerships. Insurance products for credit union members are provided

through the Co-operators Group (reported below) and CUMIS Insurance Company.

Financial planning and trust and estate services are provided through MemberCARE

Financial Services and the Co-operative Trust Company of Canada. And a variety of

products and services are offered through a number of other joint ventures, such as CU

Electronic Transaction Services (CUETS) and Credit Union Payment Services (CUPS).

CUC assets (excluding Co-operative Trust) in 1996 were $1.6 billion, with liabilities

of $1.5 billion. The debt-to-asset ratio was 0.95 and members’ equity was $85.5 million.

Communities with Credit Unions

+ All Other Communities

Figure 5: Location of credit unions in Saskatchewan, 1996

Source: Saskatchewan Department of Justice, Annual Returns

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Revenues were $125.7 million, with a surplus of $4 million. CUC employed approximately

360 people, with a total wage bill of $20.5 million. Capital investment was $3.7 million in

1996, relatively unchanged from 1989 after adjusting for the CPI.

Co-operative Trust Company of Canada

Substantial growth in the co-operative sector during the 1940s generated a demand for

long-term loans. This need could not be adequately met by the small localized credit

unions that existed at the time, and Co-operative Trust was established in 1952 to provide

individuals with trust services and to extend long-term loans to co-operative organizations.

In 1967, Co-operative Trust expanded beyond the boundaries of Saskatchewan to

become a national firm. Today, even though Co-operative Trust is governed by a board

representing credit union systems across Canada, CUC still holds 51 percent of the voting

shares. 31

National membership was 148 in 1996 compared to 190 in 1989. Prorating the 1996

annual report at 51 percent, assets attributable to Saskatchewan were $487.2 million,

liabilities were $463.7 million, and the debt-to-asset ratio calculated as 0.95. Members’

equity was determined to be $23.6 million, revenues were $44 million, and the surplus,

$2.2 million. Co-operative Trust paid 180 employees a total wage bill of $9.3 million in

1996, and capital investment was calculated at $580,000.

The Co-operators

Co-operators Group Limited is a national firm that is owned by 30 co-operatives across

Canada. In Saskatchewan, ownership consists of Federated Co-operatives, Credit Union

Central, and Saskatchewan Wheat Pool. 32 Co-operators Group is the holding company

for the following wholly owned companies: Co-operators Life Insurance, Co-operators

General Insurance, COSECO Insurance Company, The Sovereign General Insurance

Company, Co-operators Financial Services Limited, Co-operators Investment Counselling,

Co-operators Development Corporation, Federated Agencies Limited, and HB

Group Insurance Management Limited. Co-operators General Insurance and Co-

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S ECTORAL A NALYSIS •

operators Life Insurance accounted for 87 percent of revenues in 1996. Co-operators Data

Services Limited (CDSL), previously owned by The Co-operators, was recently restructured

and as of 1996 functioned as an affiliate of The Co-operators.

In 1996, it was calculated that The Co-operators Group owned assets worth $170

million in Saskatchewan, with liabilities assessed at $145 million. Revenue from Saskatchewan

was $65 million (investment income not included), with a surplus of $3 million.

Co-operators employed 500 people, with the majority working for Co-operators Life

Insurance, which is based in the province. The wage bill for Saskatchewan was $25

million and capital investment was determined to be zero.

Co-operative Hail Insurance

First organized in 1947 by a group of farmers in the Edenwold district of Saskatchewan,

Co-operative Hail Insurance, based in Regina, boasts a total membership of nearly 88,000

individuals and 18,599 policy holders in Saskatchewan and Manitoba. Statistics reported

here reflect Saskatchewan’s share of this economic activity. Saskatchewan farmers account

for more than 74 percent of the co-operative’s membership, with 64,884 members in 1996.

There were 14,566 policies written in Saskatchewan in

1996, which represented revenues of more than $26

million.

Assets in 1996 were calculated at $25.6 million.

With liabilities of $4 million, the co-operative enjoyed

a debt-to-asset ratio of 0.16. Members’ equity was

$21.4 million. Total revenues for Saskatchewan in 1996

were $26.4 million, with a surplus of $1.4 million. Due

Co-operative Hail Insurance boasts

a total membership of nearly 88,000 individuals

and 18,599 policy holders in

Saskatchewan and Manitoba. The company

wrote 14,566 policies in Saskatchewan in

1996, which represented revenues of more

than $26 million.

to the fact that the head office is located in Regina, all staff and wage costs were assumed

to rest wholly in this province. Compared to 1989, the reported number of full-time staff

positions had fallen from 10 to 7, although the wage bill increased from $254,000 in 1989

to $337,000 in wages and benefits in 1996. It should be noted that nearly 40 percent of the

total number of employees in 1989 were part time.

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Community Service Co-operatives

Community service co-operatives meet a variety of needs, including health care, fire

protection, funeral services, water systems, and adult education, to highlight a few.

There were 47 community service co-operatives in 1996, with a total membership of more

than 30,500. This represented a 20.5 percent growth in the number of co-operatives since

1989 and an increase of 43.3 percent in active membership, a large part of which can be

attributed to the method one health clinic used to record its membership. Despite the

growth of this sector, one type of service co-op has disappeared since 1989. Department of

Justice records reported 5 bus service co-operatives in 1989, but none were active in 1996.

Total assets for the community service sector in 1996 were $6.1 million compared to

$4.9 million in 1989, an increase of 2.2 percent after adjusting for the CPI (see Table 18).

Liabilities within the sector fell substantially, from $2.7 million in 1989 to $1.8 million in

1996, resulting in a sharp decrease in the average debt-to-asset ratio, from 0.27 to 0.13.

Members’ equity also grew significantly since 1989, with the $4.3 million reported in 1996

representing an increase (adjusted for CPI) of more than 60 percent.

Table 18: Comparison of community service co-operatives, 1989 and 1996

Descriptor 1989 1996 % Difference % Difference

(x 1000)* (x 1000)* (unadjusted) (adjusted for

inflation)

Assets $4,933 $6,101 23.7 2.2

Liabilities $2,723 $1,786 -34.4 -45.8

Average debt/asset 0.27 0.13 -51.9 na

Members’ equity $2,210 $4,316 95.3 61.3

Revenue $12,125 $14,618 20.6 -0.4

Surplus $365 $368 0.8 -16.7

Employees 280 291 3.9 na

Wage bill $6,914 $9,412 36.1 12.4

Capital investment $279 $469 68.1 38.9

* Except for debt/asset and number of employees

Note: The 1989 figures include the five bus co-ops, none of which were active in 1996. Because no comparisons

were possible, bus co-ops do not appear in the comparative tables; consequently, the 1989 descriptors

in those tables will not add up to the figures shown here.

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S ECTORAL A NALYSIS •

Despite the financial health of this sector and the increase in the number of cooperatives,

revenues in 1996 were virtually the same as in 1989, declining 0.4 percent after

adjusting for inflation. After a similar adjustment, the surplus in 1996 was 16.7 percent

lower than in 1989. Employment increased 3.9 percent, from 280 individuals in 1989 to

291 in 1996. The wage bill grew at a greater rate (12.4 percent), after adjusting for the CPI,

from $6.9 million paid in 1989 to $9.4 million in 1996. Increases in capital investment were

also substantial, rising from $279,000 to $469,000, an adjusted increase of 38.9 percent. The

1996 financial statistics for the different community service co-operatives are presented in

Table 19 (overleaf).

Health Care

Excluding a number of recently established health co-operatives not yet providing financial

information, the number analysed for this study was 8, the same as in 1989. The total

membership of 26,320 reported in 1996 was largely accounted for by the three largest community

clinics—those in Regina, Saskatoon, 33 and Prince Albert. Assets increased slightly

over the period, but when combined with a substantial decline in liabilities, revealed a 78

percent increase in members’ equity. Although revenues increased from $11 million to

nearly $14 million, this represented only a 1.5 percent increase when adjusted for the CPI.

The adjusted surplus reported in 1996 was 44.1 percent higher, at $356,000. The health

co-operatives accounted for at least 272 paid positions, 34 with a wage bill of $9.2 million

in 1996 compared to $6.6 million in 1989.

Fire Protection

The number of fire protection co-operatives did not change between 1989 and 1996,

although membership over the same period increased from 2,170 to 2,626. Total revenues

and the surplus were substantially higher, and capital investment increased by 50 percent.

In addition, the number of employees increased from 6 to 9 part time, while the wage bill

rose 17 percent. In general, these co-operatives maintained low debt-to-asset ratios, with

the majority indicating zero liabilities.

U NIVERSITY OF S ASKATCHEWAN • 79


Table 19: Summary of community service co-operatives ,1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

Health 10 26,320 26,320 195 77 9,220 13,761 356 419 4,145 1,665 2,480 0.29

Fire protection 9 2,626 2,626 0 9 14 195 28 9 660 5 654 0.02

Funeral 3 117 117 0 2 1 17 11 0 63 0 63 0.00

Bus service 0 0 0 0 0 0 0 0 0 0 0 0 0.00

Water systems 18 233 233 0 0 0 78 4 30 919 64 854 0.09

Adult education 5 291 291 2 1 73 296 -36 0 114 27 87 0.30

Other service 2 995 995 4 1 104 270 6 11 201 24 177 0.09

Total/average 47 30,582 30,582 201 90 9,412 14,618 368 469 6,101 1,786 4,316 0.13

* Debt/Asset figures do not include extreme figures

Sources: Saskatchewan Department of Justice, Annual Returns;

annual reports of selected co-operatives

Table 20: Summary of other types of co-operatives, 1996

Members Employees Capital Member Debt/

Type Number Registered Active Full Part Wage Bill Revenue Surplus Investment Assets Liabilities Equity Asset*

Time Time (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000) (x 1000)

Housing 21 1,108 1,108 4 25 300 7,091 1 17 52,767 49,308 3,459 0.87

Real estate 8 717 717 5 8 64 233 29 176 578 108 470 0.07

Employment 7 52 52 13 5 50 74 -1 0 31 13 18 0.42

Publishing 5 277 277 7 2 247 590 -33 0 185 167 18 0.49

Misc. 10 405 405 15 6 165 899 0 42 608 327 281 0.27

Total/average 51 2,559 2,559 44 46 826 8,887 -4 235 54,169 49,922 4,247 0.56

* Debt/Asset figures do not include extreme values

Sources: Saskatchewan Department of Justice, Annual Returns;

annual reports of selected co-operatives


S ECTORAL A NALYSIS •

Funerals

Only 3 funeral co-operatives were reported active in 1996, compared to 4 in 1989. The

loss of the largest co-operative negatively impacted all financial information collected,

with active memberships, number of employees, and wages all declining substantially.

Revenues were also down, and no capital investment was reported in 1996.

Water Systems

The number of water supply co-operatives increased from 4 reporting in 1989 to 18 in

1996, with active membership growing from 64 to 233. Assets held by the water system

co-operatives increased dramatically, from $53,000 in 1989 to $919,000 in 1996, while the

increase in liabilities was relatively slight, from $47,000 to $64,000. The average debt-toasset

ratio fell from 0.26 to 0.09 between 1989

and 1996, with members’ equity growing from

a mere $5,000 to $854,000.

The water system co-operatives reported

revenue of $78,000 in 1996, compared to $3,000

Assets held by the water system co-operatives

increased dramatically, from $53,000 in 1989 to $919,000 in

1996, while the increase in liabilities

was relatively slight, from $47,000 to $64,000.

in 1989, although the total surplus remained low, increasing only $3,000 between the two

studies. Despite the significant increase in numbers and financial resources, the water

co-operatives continued to operate with only volunteer labour. Capital investment in

1996 was reported as $30,000, down from $52,000 in 1989, suggesting that most capital

investment occurred between the two studies, with maintenance costs and the up-keep

of existing systems accounting for the small surplus reported in 1996.

Adult Education

The 5 adult education co-operatives active in 1996 reported 291 active members, down

26 percent from the 1989 figures. Specific areas of interest included co-operative education

and development, promotion of the arts, and preservation of culture. Assets were $114,000,

down considerably from the $259,000 reported in 1989, with a corresponding fall in liabilities

and members’ equity, which dropped from $199,000 to $87,000. The average debt-

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

to-asset ratio fell from 0.47 in 1989 to 0.30 in 1996. Revenues declined by 4 percent and a

loss of $36,000 was reported in 1996, compared to a surplus of $75,000 in 1989. Further

reflecting the reduced economic impact of adult educational co-operatives, employment

fell from 6 in 1989 to 3 in 1996, with a 37 percent drop in the wage bill.

Other Community Services

Other community services consisted of 2 co-operatives, established to support those with

mental disabilities and to enhance the quality of life for disadvantaged individuals. In

1996, assets and members’ equity had doubled, despite the loss of 2 co-operatives reporting

in 1989. Liabilities increased at a much higher rate—from $6,000 in 1989 to $24,000

in 1996—although they remained relatively low, and the average debt-to-asset ratio was

calculated as 0.09 compared to 0.02 in 1989.

Revenue, adjusted for the CPI, increased slightly in 1996 compared to 1989, but the

surplus decreased from $30,000 to $6,000 over the same period. Employment rose by 2

full-time positions to a total of 5, which represented a 67 percent increase. The total wage

bill was unchanged after adjusting for inflation, although capital investment was $11,000

in 1996, compared to zero in 1989.

Other Types of Co-operatives

This category of co-operatives includes those involved in housing, real estate development,

employment, publishing, and other unrelated activities. Since it does not

represent any particular activity or industry, this report does not compare aggregate data

as it was felt that its heterogeneity would be too confounding. Comparisons were limited

instead to the 5 types of co-operatives identified. The 1996 financial data for this sector is

provided in Table 20 (see page 80).

Housing

Housing co-operatives represent the largest category in this sector in terms of numbers

and financial activity. As is the case with child-care co-operatives, collective ownership of

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housing units can help increase the number of affordable units available. In 1996, there

were 21 housing co-operatives with 1,108 active members, representing a slight decline in

the number of co-operatives, but a 9 percent increase in active membership since 1989.

Although assets fell by $0.6 million, liabilities declined to an even greater extent, resulting

in an average debt-to-asset ratio that was virtually unchanged at 0.87. There was an increase

of 43.7 percent in members’ equity, adjusted for inflation. Although revenues were

30 percent lower in 1996, the housing co-operatives were able to break even, unlike in

1989, when a loss of $202,000 was reported.

The housing co-operatives employed 29 people (4 full time and 25 part time) in 1996,

down slightly from 1989, and the wage bill was much lower, at $300,000 compared to the

$397,000 reported in 1989. Co-operatives representing 7 positions failed to indicate their

wages, but when allowances were made for these positions, the average wage paid was

still 9.2 percent lower in 1996 after adjusting for inflation. Capital investment was down

sharply in 1996, although, like wages, this may be due to the fact that most co-operatives

did not indicate capital investment in their annual reports for 1996.

Real Estate Development

This category includes co-operatives that deal with the building of nonresidential facilities,

as well as the purchase of land and the regulation of development in various communities.

The enterprises reporting as real estate developments were primarily cottage

and resort co-operatives. The number of co-operatives was

unchanged since 1989, although there had been some

turnover, and active membership increased by 40 percent.

Although the number of co-operatives did not change, assets,

liabilities, revenue, and surplus were markedly lower

in 1996. At the same time, members’ equity increased from

$334,000 to $470,000 and the average debt-to-asset ratio fell

from 0.35 to 0.07.

Members’ equity in real estate

development

co-operatives increased from

$334,000 to $470,000 between

1989 and 1996, and the average

debtto-asset

ratio fell from

Of note is the change in employment since 1989, when there were no paid positions

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

reported. In 1996 there were 13 positions (5 full time and 8 part time) and a total wage bill

of $64,000. All but one of these positions are associated with a single enterprise. Capital

investment, reported as zero in 1989, was $176,000 in 1996. As with the employment statistics,

a single enterprise (the same one) accounted for most of this investment.

Employment

One response to high levels of unemployment has been the formation of employment

co-operatives, with the primary focus of providing jobs for their members. Although

financial data for most of the employment co-operatives was unavailable for 1996 due to

a very low level of reporting, some general observations are possible. The number of cooperatives

has declined by 1—from 8 to 7—since 1989, while membership has fallen by

more than one-half—from 119 to 52—and the number of people employed has fallen

from 49 positions in 1989 to 18 in 1996.

Publishing

The number of publishing co-operatives reporting in 1996 was 5, up from 3 in 1989, and

membership increased from 207 to 277 active members. Despite these hopeful signs of

growth, the financial statistics reported in 1996 were of some concern, with assets declining

and liabilities increasing by 65 percent. Although the average debt-to-asset ratio fell

from 0.55 in 1989 to 0.49 in 1996, this calculation excluded one co-operative in which

liabilities exceeded assets by more than 200 percent. Members’ equity fell from $125,000

in 1989 to $18,000 in 1996.

Revenue was 3 percent lower in 1996, and the co-operatives collectively reported a

deficit of $33,000, similar to the $28,000 deficit reported in 1989. Employment fell 40

percent, although the average wage, adjusted for inflation, actually increased by 26.4

percent, most likely due to the fact that a greater proportion of the remaining positions

were full time. The decline in capital investment—from $7,000 in 1989 to virtually zero

in 1996—is further evidence of the difficulties being experienced by these co-operatives.

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Miscellaneous

The co-operatives listed as miscellaneous contain a varied collection of enterprises,

including snowploughs, crafts, a railway, and film production companies. Of the 10

listed as active in 1996, financial data were available for only 5, although information on

membership and employees was available for all 10. Active membership increased from

369 to 405, although total membership declined from 1989, when it was reported as 472.

Employment declined as well, from 27 people in 1989 to 21 in 1996, with a larger decline

in the number of part-time positions.

Francophone Co-operatives

The co-operatives listed in this section are dispersed throughout the previous sectors.

They do, however, warrant further discussion as a separate body because of their

role in sustaining Francophone communities.

Francophone co-operatives place a high priority on preserving and promoting the

French language and culture, providing financial services, retail, housing, literature,

education, and child care to Francophones in Saskatchewan. A total of 29 such cooperatives

representing 2,694 members were found to be active in 1996 compared to

the 23 reported in 1990.

Types of co-operatives included preschools (18), a community hall, a recreation cooperative,

Caisses Populaires, housing, publishing, and retail. Assets totalled $10.4 million

in 1996, with liabilities of $9.7 million. The average debt-to-asset ratio was relatively low

at 0.23, with most of the reported debt held by the Caisses Populaires and the housing

co-operative. Members’ Equity was reported as $762,351. Total revenues in 1996 were

reported at $1.8 million, with a loss of $12,546. The Francophone co-operatives provided

21 full-time and 26 part-time positions in 1996, with a total wage bill of $665,502 and

capital investments worth $4,545.

U NIVERSITY OF S ASKATCHEWAN • 85


Comparative Tables

Farming

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 44 36 -8 -18%

Membership

Total* 234 224 -10 -4%

Active* 234 224 -10 -4%

Inactive* 0 0 0 na

Employees

All* 16 28 12 75%

Full-time* 5 13 8 160%

Part-time* 11 15 4 36%

Wage bill 140 348 208 149%

Revenue 8,461 3,304 -5,157 -61%

Surplus 1,313 683 -630 -48%

Cap investment 547 467 -80 -15%

Assets 13,881 4,709 -9,172 -66%

Liabilities 10,166 2,105 -8,061 -79%

Members’ equity 3,715 2,604 -1,111 -30%

Debt/asset* 0.67 0.45 -0.22 -33%

Note: The Department of Justice does

not presently request a distinction

between active and inactive, and most

co-operatives appeared to be submitting

an aggregate number. It is anticipated

that inactive membership is somewhat

understated and active membership

somewhat overstated in 1996, compared

to 1989.

Feeder

Number of co-ops* 55 137 82 149% See endnote 8, page 109.

Membership

Total* 1,482 5,989 4,507 304%

Active* 1,040 5,742 4,702 452%

Inactive* 442 147 -295 -67%

Employees

All* 65 172 107 165%

Full-time* 1 5 4 400%

Part-time* 64 167 103 161%

Wage bill 115 172 57 50%

Revenue 11,596 na na na

Surplus -180 19 199 -111%

Cap investment 1,135 na na na

Assets 16,877 43,361 26,484 157%

Liabilities 17,255 42,903 25,648 149%

Members’ equity -378 397 775 -205%

Debt/asset* 0.83 0.96 0.13 16%

86 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

Grazing

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 131 139 8 6%

Membership

Total* 1,442 1,909 467 32%

Active* 1,376 1,902 526 38%

Inactive* 66 0 -66 -100%

Employees

All* 39 62 23 59%

Full-time* 2 2 0 0%

Part-time* 37 60 23 62%

Wage bill 194 200 6 3%

Revenue 2,409 3,265 856 36%

Surplus 66 33 -33 -50%

Cap investment 187 57 -130 -70%

Assets 2,946 4,013 1,067 36%

Liabilities 1,776 1,609 -167 -9%

Members’ equity 1,171 2,404 1,233 105%

Debt/asset* 0.45 0.31 -0.14 -31%

Breeding

Number of co-ops* 5 13 8 160% See endnote 8, page 109.

Membership

Total* 391 794 403 103%

Active* 135 794 659 488%

Inactive* 256 0 -256 -100%

Employees

All* 8 20 12 150%

Full-time* 4 6 2 50%

Part-time* 4 14 10 250%

Wage bill 68 55 -13 -19%

Revenue 824 229 -595 -72%

Surplus 210 14 -196 -93%

Cap investment 47 0 -47 -100%

Assets 932 677 -255 -27%

Liabilities 653 501 -152 -23%

Members’ equity 279 175 -104 -37%

Debt/asset* 0.38 0.38 0.00 0%

U NIVERSITY OF S ASKATCHEWAN • 87


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Seed Cleaning

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 10 10 0 0%

Membership

Total* 2,078 2,519 441 21%

Active* 1,267 2,519 1,252 99%

Inactive* 811 0 -811 -100%

Employees

All* 25 22 -3 -12%

Full-time* 15 13 -2 -13%

Part-time* 10 9 -1 -10%

Wage bill 341 491 150 44%

Revenue 868 1,066 198 23%

Surplus 29 -125 -154 -531%

Cap investment 21 154 133 633%

Assets 1,798 1,860 62 3%

Liabilities 671 473 -198 -30%

Members’ equity 1,127 1,387 260 23%

Debt/asset* 0.33 0.24 -0.09 -27%

Farmers’ Markets

Number of co-ops* 48 41 -7 -15%

Membership

Total* 4,172 2,410 -1,762 -42%

Active* 2,794 2,013 -781 -28%

Inactive* 1,378 397 -981 -71%

Employees

All* 24 24 0 0%

Full-time* 1 1 0 0%

Part-time* 23 23 0 0%

Wage bill 33 44 11 33%

Revenue 193 244 51 26%

Surplus 8 3 -5 -63%

Cap investment 6 9 3 50%

Assets 191 305 114 60%

Liabilities 57 39 -18 -32%

Members’ equity 134 266 132 99%

Debt/asset* 0.11 0.06 -0.05 -45%

88 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

Soil Conservation

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 15 7 -8 -53%

Membership

Total* 502 201 -301 -60%

Active* 342 201 -141 -41%

Inactive* 160 0 -160 -100%

Employees

All* 1 2 1 100%

Full-time* 0 0 0 na

Part-time* 1 2 1 100%

Wage bill 2 4 2 100%

Revenue 164 68 -96 -59%

Surplus -5 25 30 -600%

Cap investment 3 84 81 2,700%

Assets 45 128 83 184%

Liabilities 5 58 53 1,060%

Members’ equity 40 70 30 75%

Debt/asset* 0.2 0.09 0 -55%

Fishing

Number of co-ops* 22 10 -12 -55%

Membership

Total* 804 529 -275 -34%

Active* 804 529 -275 -34%

Inactive* 0 0 0 na

Employees

All* 13 4 -9 -69%

Full-time* 0 0 0 na

Part-time* 13 4 -9 -69%

Wage bill 40 8 -32 -80%

Revenue 276 54 -222 -80%

Surplus 14 23 9 64%

Cap investment 20 0 -20 -100%

Assets 312 48 -264 -85%

Liabilities 35 14 -21 -60%

Members’ equity 277 34 -243 -88%

Debt/asset* 0.25 0.14 0 -44%

U NIVERSITY OF S ASKATCHEWAN • 89


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Saskatchewan Wheat Pool

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 1 1 0 0%

Membership

Total* 87,088 76,000 -11,088 -13%

Active* 64,348 57,000 -7,348 -11%

Inactive* 22,740 21,000 -1,740 -8%

Employees

All* 3,002 2,500 -502 -17%

Full-time* 2,897 na na na

Part-time* 105 na na na

Wage bill 87,987 100,000 12,013 14%

Revenue 1,592,151 4,133,241 2,541,090 160%

Surplus 5,337 48,355 43,018 806%

Cap investment 29,710 78,428 48,718 164%

Assets 672,100 1,203,818 531,718 79%

Liabilities 382,564 734,580 352,016 92%

Numbers here represent

Saskatchewan-only data.

See text pages 53–54 and

endnote 12, page 109.

Members’ equity 329,737 281,543 -48,194 -15% See endnote 12, page 109.

Debt/asset* 0.57 0.61 0.04 7%

Saskatchewan Dairy Producers

Numbers here represent

Saskatchewan-only data.

Number of co-ops* 1 0 -1 -100%

Membership

Total* 4,572 2,000 -2,572 -56%

Active* 1,601 512 -1,089 -68%

Inactive* 2,971 1,488 -1,483 -50%

Employees

All* 683 516 -167 -24%

Full-time* 658 na na na

Part-time* 25 na na na

Wage bill 25,031 22,643 -2,388 -10%

Revenue 180,951 159,682 -21,269 -12%

Surplus 4,714 3,062 -1,652 -35%

Cap investment 33,777 529 -33,248 -98%

Assets 100,722 73,248 -27,474 -27%

Liabilities 49,885 44,251 -5,634 -11%

Members’ equity 50,837 28,998 -21,839 -43%

Debt/asset* 0.5 0.6 0.10 20%

90 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

Other Agricultural Co-operatives

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 13 13 0 0%

Membership

Total* 1,390 773 -617 -44%

Active* 662 773 111 17%

Inactive* 728 0 -728 -100%

Employees

All* 42 50 8 19%

Full-time* 4 15 11 275%

Part-time* 38 35 -3 -8%

Wage bill 170 160 -10 -6%

Revenue 4,562 1,462 -3,100 -68%

Surplus 40 85 45 113%

Cap investment 2 283 281 14,050%

Assets 2,451 2,480 29 1%

Liabilities 1,354 1,482 128 9%

Members’ equity 1,098 998 -100 -9%

Debt/asset* 0.35 0.29 -0.06 -17%

Small Business Loans Associations

Number of co-ops* 27 147 120 444%

Membership

Total* 186 1,672 1,486 799%

Active* 186 1,672 1,486 799%

Inactive* 0 0 0 na

Employees

All* 0 59 59 na

Full-time* 0 0 0 na

Part-time* 0 59 59 na

Wage bill 0 60 60 na

Revenue 7 294 287 4,100%

Surplus 3 -8 -11 -367%

Cap investment 0 0 0 na

Assets 107 3,233 3,126 2921%

Liabilities 96 2,743 2,647 2757%

Members’ equity 11 487 476 4327%

Debt/asset* 0.83 0.81 -0.02 -2%

U NIVERSITY OF S ASKATCHEWAN • 91


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Rural Development Corporations

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 14 18 4 29%

Membership

Total* 111 135 24 22%

Active* 111 135 24 22%

Inactive* 0 0 0 na

Employees

All* 39 10 -29 na

Full-time* 9 2 -7 na

Part-time* 30 8 -22 na

Wage bill 126 98 -28 na

Revenue 742 233 -509 -69%

Surplus 132 -27 -159 -120%

Cap investment 1 0 -1 na

Assets 940 1,025 85 9%

Liabilities 309 437 128 41%

Members’ equity 632 589 -43 -7%

Debt/Asset* 0.34 0.42 0.08 24%

Community Halls

Number of co-ops* 145 109 -36 -25%

Membership

Total* 11,071 7,459 -3,612 -33%

Active* 6,113 6,955 842 14%

Inactive* 4,958 504 -4,454 -90%

Employees

All* 51 34 -17 -33%

Full-time* 3 0 -3 -100%

Part-time* 48 34 -14 -29%

Wage bill 62 63 1 2%

Revenue 983 862 -121 -12%

Surplus -1 -15 -14 1,400%

Cap investment 79 27 -52 -66%

Assets 3,389 3,149 -240 -7%

Liabilities 98 22 -76 -78%

Members’ equity 3,291 3,127 -164 -5%

Debt/asset* 0.03 0.01 -0.02 -67%

92 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

Curling and Recreational Centres

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 101 95 -6 -6%

Membership

Total* 12,432 11,466 -966 -8%

Active* 8,241 11,348 3,107 38%

Inactive* 4,191 118 -4,073 -97%

Employees

All* 117 120 3 3%

Full-time* 11 12 1 9%

Part-time* 106 108 2 2%

Wage bill 528 673 145 27%

Revenue 3,233 2,931 -302 -9%

Surplus 211 1 -210 -100%

Cap investment 639 88 -551 -86%

Assets 10,173 10,786 611 6%

Liabilities 1,847 1,220 -627 -34%

Members’ equity 8,326 9,566 1,240 15%

Debt/asset* 0.08 0.1 0.02 25%

Television

Number of co-ops* 7 5 -2 -29%

Membership

Total* 2,649 1,734 -915 -35%

Active* 2,592 1,734 -858 -33%

Inactive* 57 0 -57 -100%

Employees

All* 117 174 57 49%

Full-time* 76 117 41 54%

Part-time* 41 57 16 39%

Wage bill 1,872 4,472 2,600 139%

Revenue 11,759 24,051 12,292 105%

Surplus 1,926 1,491 -435 -23%

Cap investment 6,262 5,328 -934 -15%

Assets 19,962 27,378 7,416 37%

Liabilities 13,530 11,459 -2,071 -15%

Members’ equity 6,433 15,919 9,486 147%

Debt/asset* 0.28 0.23 -0.05 -18%

U NIVERSITY OF S ASKATCHEWAN • 93


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Other Recreational Co-operatives

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 13 10 -3 -23%

Membership

Total* 967 768 -199 -21%

Active* 513 768 255 50%

Inactive* 454 0 -454 -100%

Employees

All* 42 15 -27 -64%

Full-time* 13 0 -13 -100%

Part-time* 29 15 -14 -48%

Wage bill 181 56 -125 -69%

Revenue 503 385 -118 -23%

Surplus -204 46 250 -123%

Cap investment 69 10 -59 -86%

Assets 1,010 745 -265 -26%

Liabilities 200 223 23 12%

Members’ equity 810 522 -288 -36%

Debt/asset* 0.17 0.09 -0.08 -47%

Child-Care Centres

Number of co-ops* 45 54 9 20%

Membership

Total* 3,237 3,436 199 6%

Active* 3,237 3,106 -131 -4%

Inactive* 0 330 330 na

Employees

All* 367 387 20 5%

Full-time* 279 269 -10 -4%

Part-time* 88 118 30 34%

Wage bill 5,475 6,297 822 15%

Revenue 7,240 8,899 1,659 23%

Surplus 163 240 77 47%

Cap investment 387 385 -2 -1%

Assets 3,424 4,561 1,137 33%

Liabilities 1,259 1,228 -31 -2%

Members’ equity 2,165 3,336 1,171 54%

Debt/asset* 0.32 0.26 -0.06 -19%

94 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

Preschools

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 75 79 4 5% See endnote 19, page 110.

Membership

Total* 6,738 5,837 -901 -13%

Active* 6,738 5,789 -949 -14%

Inactive* 0 48 48 na

Employees

All* 106 132 26 25%

Full-time* 31 33 2 6%

Part-time* 75 99 24 32%

Wage bill 546 778 232 42%

Revenue 879 1,306 427 49%

Surplus 68 43 -25 -37%

Cap investment 19 156 137 721%

Assets 365 682 317 87%

Liabilities 23 137 114 496%

Members’ equity 341 545 204 60%

Debt/asset* 0.03 0.04 0.01 33%

Federated Co-operatives Limited

Number of co-ops* 1 1 0 0%

Membership

Total* 176 169 -7 -4%

Active* 176 169 -7 -4%

Inactive* na na na na

Numbers here represent

Saskatchewan-only data.

Note also that $163 million

of FCL Members’

Equity for 1996 is also

reported as Assets in the

table for Affiliated Retail

Co-ops, below. The $135.4

million reported here is

what is left over after deducting

the $163 million.

Employees

All* 1,183 1,148 -35 -3%

Full-time* 1,183 1,148 -35 -3%

Part-time* na 0 na na See page 107.

Wage bill 44,470 50,063 5,593 13%

Revenue na 863,302 na na See text page 71.

Surplus na 60,829 na na See text page 71.

Cap investment 14,478 17,139 2,661 18%

Assets 582,095 442,445 -139,650 -24% See endnote 23, page 110

Liabilities 170,209 143,672 -26,537 -16% and text page 71.

Members’ equity 153,138 135,430 -17,708 -12% See note above

Debt/asset* 0.29 0.32 0.03 10% and endnote 22, page 110.

U NIVERSITY OF S ASKATCHEWAN • 95


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Affiliated Retail Co-operatives

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 176 169 -7 -4%

Membership

Total* 349,000 335,000 -14,000 -4%

Active* 288,000 282,000 -6,000 -2%

Inactive* 61,000 53,000 8,000 13%

Employees

All* 5,400 4,960 -440 -8%

Full-time* 5,400 4,960 -440 -8%

Part-time* 0 0 0 na See page 107.

Wage bill 70,000 79,735 9,735 14%

Revenue 757,159 933,730 176,571 23%

Surplus 35,058 79,735 44,677 127%

Cap investment na 4,891 na na

Assets 354,646 474,233 119,587 34%

Liabilities 121,876 68,365 -53,511 -44%

Members’ equity 232,770 405,868 173,098 74%

Debt/asset* 0.34 0.14 -0.20 -59%

Other Retail Co-operatives

Number of co-ops* 9 22 13 144%

Membership

Total* 1,159 1,415 256 22%

Active* 1,054 1,415 361 34%

Inactive* 105 0 -105 -100%

Employees

All* 9 5 -4 -44%

Full-time* 2 0 -2 -100%

Part-time* 7 5 -2 -29%

Wage bill 55 11 -44 -80%

Revenue 367 104 -263 -72%

Surplus 4 -6 -10 -250%

Cap investment 21 0 -21 -100%

Assets 171 80 -91 -53%

Liabilities 105 45 -60 -57%

Members’ equity 66 36 -30 -45%

Debt/asset* 0.53 0.33 -0.2 -38%

96 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

Credit Unions See endnote 26, page 110.

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 351 340 -11 -3%

Membership

Total* 570,694 555,188 -15,506 -3%

Active* 570,694 555,188 -15,506 -3%

Inactive* 0 0 0 na

Employees

All* 2,469 2,556 87 4%

Full-time* 2,469 2,556 87 4%

Part-time* 0 0 0 na See page 107.

Wage bill 72,500 92,033 7,930 27%

Revenue 586,700 480,361 -106,339 -18%

Surplus 25,500 40,088 14,588 57%,

Cap investment 8,902 11,199 2297 26% See endnote 30, page 110.

Assets 4,986,800 6,106,584 1,119,784 22%

Liabilities 4,793,100 5,745,655 952,555 20%

Members’ equity 193,700 360,929 167,229 86%

Debt/asset* 0.96 0.94 -0.02 -2%

Credit Union Central See endnote 26, page 110.

Number of co-ops* 1 1 0 0%

Membership

Total* 430 376 -54 -13%

Active* 430 376 -54 -13%

Inactive* 0 0 0 na

Employees

All* 299 360 61 20%

Full-time* 250 275 25 10%

Part-time* 49 85 36 73%

Wage bill 10,503 20,495 9,992 95%

Revenue 196,880 125,668 -71,212 -36%

Surplus 8,900 4,022 -4,878 -55%

Cap investment 3,093 3,741 648 21%

Assets 1,642,700 1,616,954 -25,746 -2%

Liabilities 1,495,124 1,531,483 36,359 2%

Members’ equity 96,485 85,471 -11,014 -11%

Debt/asset* 0.91 0.95 0.04 4%

U NIVERSITY OF S ASKATCHEWAN • 97


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Co-operative Trust Company of Canada See endnote 26, page 110.

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 1 1 0 0%

Membership

Total* 190 148 -42 -22%

Active* 190 148 -42 -22%

Inactive* 0 0 0 na

Figures here represent

Saskatchewan-only data.

1996 financial figures

equal 51% of the total

enterprise.

Employees

All* 155 180 25 16%

Full-time* 155 180 25 16%

Part-time* 0 0 0 na See page 107.

Wage bill 4,310 9,310 5,000 116%

Revenue 29,331 44,002 14,671 50%

Surplus na 2,230 na na

Cap investment 608 580 -28 -5%

Assets 221,464 487,236 265,772 120%

Liabilities 491,500 463,676 -27,824 -6%

Members’ equity 24,292 23,560 -732 -3%

Debt/asset* na 0.95 na na

The Co-operators See endnote 26, page 110.

Number of co-ops* 1 1 0 0%

Membership

Total* 3 3 1 33%

Active* 3 3 0 0%

Inactive* 0 0 0 na

Employees

All* 973 500 -473 -49%

Full-time* 784 na na na

Part-time* 189 na na na

Wage bill 28,432 25,000 -3,432 -12%

Revenue 76,209 65,000 -11,209 -15%

Surplus na 3,000 na na

Cap investment na 0 na na

Assets 22,000 170,000 148,000 673%

Liabilities na 145,000 na na

Members’ equity na 1 na na

Debt/asset* na 0.85 na na

Figures here represent

Saskatchewan-only data.

98 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

Co-operative Hail Insurance See endnote 26, page 110.

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 1 1 0 0%

Membership

Total* 57,355 64,884 7,529 13%

Active* 12,740 14,566 1,826 14%

Inactive* 44,615 50,318 5,703 13%

Employees

All* 16 7 -9 -56%

Full-time* 10 7 -3 -30%

Part-time* 6 0 -6 -100%

Wage bill 254 337 83 33%

Revenue 12,006 26,354 14,348 120%

Surplus 2,924 1,402 -1,522 -52%

Cap investment na 8 na na

Assets 22,796 25,579 2,783 12%

Liabilities 0 4,211 4,211 na

Members’ equity 22,796 21,368 -1,428 -6%

Debt/asset* 0 0.16 na na

Health Care

Number of co-ops* 8 10 2 25%

Membership

Total* 24,845 26,320 1,475 6% See endnote 33, page 110.

Active* 17,865 26,320 8,455 47%

Inactive* 6,980 0 -6,980 -100%

Employees

All* 242 272 30 12% See endnote 34, page 110.

Full-time* 141 195 54 na

Part-time* 101 77 -24 -24%

Wage bill 6,618 9,220 2,602 39%

Revenue 11,204 13,761 2,557 23%

Surplus 204 356 152 75%

Cap investment 217 419 202 93%

Assets 3,914 4,145 231 6%

Liabilities 2,524 1,665 -859 -34%

Members’ equity 1,390 2,480 1,090 78%

Debt/asset* 0.33 0.29 -0.04 -12%

U NIVERSITY OF S ASKATCHEWAN • 99


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Fire Protection

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 9 9 0 0%

Membership

Total* 2,170 2,626 456 21%

Active* 2,138 2,626 488 23%

Inactive* 32 0 -32 -100%

Employees

All* 6 9 3 50%

Full-time* 0 0 0 na

Part-time* 6 9 3 50%

Wage bill 12 14 2 17%

Revenue 112 195 83 74%

Surplus 21 28 7 33%

Cap investment 6 9 3 50%

Assets 467 660 193 41%

Liabilities 3 5 2 67%

Members’ equity 464 654 190 41%

Debt/asset* 0.00 0.02 0.02 na

Funeral

Number of co-ops* 4 3 -1 -25%

Membership

Total* 509 117 -392 -77%

Active* 484 117 -367 -76%

Inactive* 25 0 -25 -100%

Employees

All* 6 2 -4 -67%

Full-time* 1 0 -1 na

Part-time* 5 2 -3 -60%

Wage bill 11 1 -10 -91%

Revenue 106 17 -89 -84%

Surplus 33 11 -22 -67%

Cap investment 3 0 -3 -100%

Assets 131 63 -68 -52%

Liabilities 71 0 -71 -100%

Members’ equity 61 63 2 3%

Debt/asset* 0.24 0.00 -0.24 na

100 • C ENTRE FOR THE S TUDY OF C O - OPERATIVES


S ECTORAL A NALYSIS •

Water Systems

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 4 18 14 350%

Membership

Total* 71 233 162 228%

Active* 64 233 169 264%

Inactive* 7 0 -7 -100%

Employees

All* 0 0 0 na

Full-time* 0 0 0 na

Part-time* 0 0 na na

Wage bill 0 0 0 na

Revenue 3 78 75 2,500%

Surplus 1 4 3 300%

Cap investment 52 30 -22 -42%

Assets 53 919 866 1,634%

Liabilities 47 64 17 36%

Members’ equity 5 854 849 16,980%

Debt/asset* 0.26 0.09 -0.17 -65%

Adult Education

Number of co-ops* 5 5 0 0

Membership

Total* 417 291 -126 -30%

Active* 392 291 -101 -26%

Inactive* 25 0 -25 -100%

Employees

All* 6 3 -3 -50%

Full-time* 2 2 0 0%

Part-time* 4 1 -3 -75%

Wage bill 115 73 -42 -37%

Revenue 308 296 -12 -4%

Surplus 75 -36 -111 -148%

Cap investment 0 0 0 na

Assets 259 114 -145 -56%

Liabilities 60 27 -33 -55%

Members’ equity 199 87 -112 -56%

Debt/asset* 0.47 0.3 -0.17 -36%

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Other Community Services

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 4 2 -2 50%

Membership

Total* 826 995 169 20%

Active* 321 995 674 210%

Inactive* 505 0 -505 -100%

Employees

All* 3 5 2 67%

Full-time* 2 4 2 100%

Part-time* 1 1 0 0%

Wage bill 86 104 18 21%

Revenue 210 270 60 29%

Surplus 30 6 -24 -80%

Cap investment 0 11 11 na

Assets 96 201 105 109%

Liabilities 6 24 18 300%

Members’ equity 91 177 86 95%

Debt/asset* 0.02 0.09 0.07 350%

Housing

Number of co-ops* 22 21 -1 -5%

Membership

Total* 1,045 1,108 63 6%

Active* 1,019 1,108 89 9%

Inactive* 26 0 -26 -100%

Employees

All* 32 29 -3 -9%

Full-time* 6 4 -2 -33%

Part-time* 26 25 -1 -4%

Wage bill 397 300 -97 -24%

Revenue 10,130 7,091 -3,039 -30%

Surplus -202 1 203 -100%

Cap investment 565 17 -548 -97%

Assets 53,390 52,767 -623 -1%

Liabilities 51,402 49,308 -2,094 -4%

Members’ equity 1,988 3,459 1,471 74%

Debt/asset* 0.88 0.87 -0.01 -1%

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Real Estate Development

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 8 8 0 0%

Membership

Total* 528 717 189 36%

Active* 513 717 204 40%

Inactive* 15 0 -15 -100%

Employees

All* 0 13 13 na

Full-time* 0 5 5 na

Part-time* 0 8 8 na

Wage bill 0 64 64 na

Revenue 336 233 -103 -31%

Surplus 83 29 -54 -65%

Cap investment 0 176 176 na

Assets 1,621 578 -1,043 -64%

Liabilities 1,288 108 -1,180 -92%

Members’ equity 334 470 136 41%

Debt/asset* 0.35 0.07 -0.28 -80%

Employment

Number of co-ops* 8 7 -1 -13%

Membership

Total* 119 52 -67 -56%

Active* 86 52 -34 -40%

Inactive* 33 0 -33 -100%

Employees

All* 49 18 -31 -63%

Full-time* 9 13 4 44%

Part-time* 40 5 -35 -88%

Wage bill 185 50 -135 -73%

Revenue 1,211 74 -1,137 -94%

Surplus 37 -1 -38 -102%

Cap investment 96 0 -96 -100%

Assets 245 31 -214 -87%

Liabilities 128 13 -115 -90%

Members’ equity 117 18 -99 -85%

Debt/asset* 0.44 0.42 -0.02 -5%

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Publishing

(x $1,000 unless *) Absolute %

1989 1996 Change Change

Number of co-ops* 3 5 2 67%

Membership

Total* 210 277 67 32%

Active* 207 277 70 34%

Inactive* 3 0 -3 -100%

Employees

All* 15 9 -6 -40%

Full-time* 10 7 -3 -30%

Part-time* 5 2 -3 -60%

Wage bill 269 247 -22 -8%

Revenue 608 590 -18 -3%

Surplus -28 -33 -5 18%

Cap investment 7 0 -7 -100%

Assets 226 185 -41 -18%

Liabilities 101 167 66 65%

Members’ equity 125 18 -107 -86%

Debt/asset* 0.55 0.49 -0.06 -11%

Miscellaneous

Number of co-ops* 12 10 -2 -17%

Membership

Total* 472 405 -67 -14%

Active* 369 405 36 10%

Inactive* 103 0 -103 -100%

Employees

All* 27 21 -6 -22%

Full-time* 13 15 2 15%

Part-time* 14 6 -8 -57%

Wage bill 228 165 -63 -28%

Revenue 1,149 899 -250 -22%

Surplus -7 0 7 -100%

Cap investment 0 42 42 na

Assets 809 608 -201 -25%

Liabilities 507 327 -180 -36%

Members’ equity 302 281 -21 -7%

Debt/asset* 0.39 0.27 -0.12 -31%

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Research Approach and Procedures

Due to legislative changes subsequent to the 1989 study, it was necessary to make

some modifications in the methods used to collect data for the 1996 update. In

1989, most financial data was provided by statements filed with Corporations Branch,

which, during the course of gathering statistics, moved from the Department of Consumer

and Commercial Affairs to the Department of Justice. Additional information on

credit unions and co-operative retails affiliated with FCL was provided by staff at CUC

and FCL. In 1996, more complete information on the financial activities of these organizations

was available. CUC and FCL once again provided information on their activities,

with the Department of Justice serving as the source for data on the not-for-profit cooperatives,

as well as for most of the information regarding membership and number of

employees (full and part time). A number of individual co-operatives supported this study

by generously providing copies of their 1996 annual reports. Due to our inability to contact

some co-operatives and the refusal of others to provide the information requested,

however, it was not possible to collect all relevant details. Some categories of co-operatives,

therefore, are understated in terms of their economic impact on the province.

To take advantage of the opportunity to identify changes in the co-operative sector,

we have endeavoured to duplicate the methodology of the previous survey. We have

retained the subsectors identified in 1989 and have sought to categorize new co-operatives

in a manner consistent with the previous study. Where we have elected to deviate from

the 1989 study in our definition or display of data, we have sought to modify the 1989 data

to reflect these changes to allow for valid comparisons of the two data sets.

In gathering the statistical information on the financial co-operatives, we were somewhat

reliant on the institutions themselves, as publicly available annual reports reflected

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a national rather than a provincial perspective. While grateful for their assistance, the

manner in which some of the data was collected and interpreted prior to its release to

us was unknown, making it difficult to compare with any level of confidence the 1996

findings with those compiled in 1989. As well, the relationship between CUC and the

credit unions, and the subsidiary status of the Co-operative Trust Company (51% owned

by CUC) has made it necessary to unilaterally assign various assets and liabilities, and to

some degree, aspects of operations, to different entities. For this reason, comparisons

between the two years will be limited, although ultimately all financial data has been

accounted for. Efforts were made to standardize the data in the following manner:

Fiscal Year

The year chosen for analysis was 1996. In cases where financial statements for 1996 had

not yet been filed, data from the previous year was used.

Information Sources

There were some discrepancies between information provided by central organizations

and government agencies, and the information collected from the files at the Department

of Justice. These can be attributed, in part, to differences in the definitions of various

terms. In such cases, information collected directly from the co-operative’s financial

statements at the Department of Justice was assumed to be more accurate.

The Effect of Inflation

Because the two data sets compare different points in time, it is important to factor in

the effect of inflation between 1989 and 1996. This was calculated as 21.1 percent based on

the Consumer Price Index (CPI) for Saskatchewan as reported in Economic Review 1996.

Active versus Inactive Members

Registered members are the sum of active and inactive members. Active members still

patronize the co-operative, whereas inactive members no longer do business with the or-

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ganization but are still registered as members. The Department of Justice does not

presently request a distinction between active and inactive, and most co-operatives

appeared to be submitting an aggregate number. It is anticipated that inactive membership

is somewhat understated and active membership somewhat overstated in 1996,

compared to 1989.

Full-Time versus Part-Time Employees

Co-operatives exhibited considerable latitude in classifying employees as full time or

part time. Some reported individuals who received nominal honorariums as part-time

employees. For the purposes of this study, individuals receiving $365/year or less were

assumed to be volunteers and were not included as employees (the figure in 1989 was

$300/year or less). Honorariums paid out, however, were included in total wage figures.

There was some difficulty with the designation of certain people as full-time employees,

as their remuneration was more indicative of wages paid to part-time or casual

workers. In such cases, those who were paid less than $6,000/year were listed as part-time

employees (the figure in 1989 was $5,000/year). Individuals were also designated as parttime

where co-operatives reported them as such, although they received wages greater

than $6,000/year.

Members’ Equity versus Net Worth

With the exception of the centrals and their affiliates, the majority of co-operatives

surveyed did not make a distinction between member and nonmember earnings. In these

cases, the difference between assets and debt (i.e., shares plus memberships plus retained

earnings), therefore, was designated as members’ equity.

Debt/Asset Ratios

In order to arrive at a representative value for each category, extreme values were eliminated

in calculating the average debt-to-asset ratio. These values included a ratio of

greater than 2:1 or total assets of $0 (which yielded an undefined debt-to-asset ratio).

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Due to difficulty in obtaining the necessary data, the following aggregate values are

generally overstated or understated:

Employment and Total Wage Bill

Many co-operatives contracted for various services, such as accounting and janitorial

work. The total number of employees supported by co-operatives and wages paid out,

therefore, are understated.

The level of employment is understated because a number of co-operatives showed

substantial wages paid out but failed to indicate the number of employees. The amount

of wages paid out is also understated because some co-operatives indicated that they had

a number of employees but neglected to show a breakdown of expenses.

Another difficulty was the tendency of some co-operatives, particularly the larger

ones, to count full-time equivalents (FTEs) rather than actual number of employees. In

these cases, the figures provided were accepted as the minimum number of employees.

The total number and number of part-time employees for the larger co-operatives are

somewhat understated

Capital Investment

The level of capital investment is understated because a number of co-operatives did not

include the information with their financial statements. In the case of co-operatives with

substantial levels of fixed assets, an estimate was obtained by comparing assets listed for

1996 to those recorded for the previous year, factoring in depreciation where feasible.

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Endnotes

1. For a complete description and analysis of the 1989 study, please refer to Murray Fulton, Lou Hammond

Ketilson, and L. Simbandumwe, Economic Impact Analysis of the Co-operative Sector in Saskatchewan

(Saskatoon: Centre for the Study of Co-operatives, 1991).

2. To take advantage of the opportunity to identify changes in the co-operative sector, we have duplicated

as closely as possible the methodology of the previous survey, retaining the subsectors identified in 1989

and categorizing new co-operatives in a manner consistent with the previous study. Where we have deviated

from the 1989 study in our definition or display of data, we have modified the 1989 data to reflect

these changes, which allows for a more valid comparisons of the two data sets.

3. Because the two data sets compare different points in time, it is important to factor in the effect of inflation

between 1989 and 1996. This was calculated as 21.1 percent based on the Consumer Price Index

(CPI) for Saskatchewan as reported in Saskatchewan Bureau of Statistics, Economic Review 1996 (Regina:

Government of Saskatchewan, 1997), p4.

4. Ibid.

5. In 1996, Saskatchewan Dairy Producers amalgamated with Dairyworld Foods.

6. Information provided by Saskatchewan Bureau of Statistics, Economic Review 1996.

7. Economic Impact Analysis of the Co-operative Sector in Saskatchewan, p30.

8. Fifteen co-operatives were designated as both a feeder and a breeder co-operative by the Saskatchewan

Department of Justice, Corporate Division, in 1996. For this study, co-operatives with this dual designation

were categorized as feeder co-operatives.

9. Saskatchewan Wheat Pool, Annual Report 1996.

10. Economic Impact Analysis of the Co-operative Sector in Saskatchewan, p36.

11. Saskatchewan Wheat Pool, Annual Report 1996.

12. While producers retain the voting shares and ultimate control of the enterprise, the dispersion of equity

among members and nonmembers in the form of the Class B shares initially limited identification of

members’ equity to the value attached to the voting shares. According to SWP management, producers

hold an estimated 60 percent of Class B shares. This figure was used to allow for comparative analysis

with 1989 data.

13. Murray Fulton, Lou Hammond Ketilson, and Louise Simbandumwe, Saskatchewan Co-operatives:

A Record of Community Development (Saskatoon: Centre for the Study of Co-operatives, 1992), p15.

14. Dairyworld Foods, Annual Report 1996.

15. Economic Impact Analysis of the Co-operative Sector in Saskatchewan, p39.

16. Ibid., pp40–41.

17. Saskatchewan Rural Development Corporations: Building for the Future (Regina: Saskatchewan Rural

Development, 1991), p3.

18. Local Development by Local People…How Co-operatives Can Help (Regina: Saskatchewan Co-operation

and Co-operative Development, 1986).

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19. In 1996, the Department of Justice combined preschools and playschools under a single SIC Code. As

well, a number of playschools renamed themselves as preschools for marketing purposes. For these reasons,

it was felt that separating the two, as was the case in 1989, was not feasible. Comparing the two

sets of data, therefore, the 1989 figures for preschools and playschools have been combined for comparison

with the single category—preschools—in 1996.

20. Brett Fairbairn, Building a Dream: The Co-operative Retailing System in Western Canada, 1928–1988

(Saskatoon: Western Producer Prairie Books, 1989), p7.

21. Federated Co-operatives Limited, Annual Report 1996.

22. To eliminate double counting, this amount was subtracted from FCL members’ equity, although retained

in FCL assets so as not to affect calculation of the debt-to-asset ratio. Finally, due to differences in

methodology and gaps in the data, comparison with 1989 was not generally viewed as reliable, although

individual indices have been compared where feasible.

23. FCL assets and liabilities for Saskatchewan only were unavailable. The best guess of 50% is based on

percentage of sales (38.5), percentage of net income (45.7), and percentage of salaries (53) attributed

to Saskatchewan. More weight was given to the percentage of salaries due to the location of the refinery

in Saskatchewan.

24. Economic Impact Analysis of the Co-operative Sector in Saskatchewan, p51.

25. Saskatchewan Bureau of Statistics, Economic Review 1996, p4.

26. In gathering the statistical information on the financial co-operatives, we were somewhat reliant on the

institutions themselves, as publicly available annual reports reflected a national rather than a provincial

perspective. While grateful for their assistance, the manner in which some of the data was collected and

interpreted prior to its release to us was unknown, making it difficult to compare with any level of confidence

the 1996 findings with those compiled in 1989. As well, the relationship between CUC and the

credit unions, and the subsidiary status of the Co-operative Trust Company (51% owned by CUC) has

made it necessary to unilaterally assign various assets and liabilities, and to some degree, aspects of operations,

to different entities. For this reason, comparisons between the two years will be limited, although

ultimately all financial data has been accounted for.

27. Ian MacPherson, A Very Special Trust Company: A History of the First Twenty-Five Years of Co-operative

Trust Company of Canada (Saskatoon: Co-operative Trust Company of Canada, 1978), p9.

28. Economic Impact Analysis of the Co-operative Sector in Saskatchewan, p55.

29. Credit Union Central, Annual Report 1996.

30. Originally, capital investment for credit unions in 1989 was reported as $58 million. It was later determined

that this represented total fixed assets instead. In recalculating capital investment for 1989, fixed

assets for 1988 ($56.2 million) were split evenly between buildings and equipment. The resulting depreciation

(5% and 20% respectively) was then added to the difference in fixed assets between 1988 and

1989 to get a conservative overapproximation of $8.9 million.

31. Co-operative Trust Company of Canada, Annual Report 1996.

32. Following its merger with Dairyworld Foods (Agrifoods International, British Columbia), Dairy

Producers Co-operative was no longer listed as a member in The Co-operators’ annual report.

33. Due to changes in how the Saskatoon Community Clinic records membership (families versus

individuals), comparisons of the number of members between 1989 and 1996 was not considered valid.

34. Number is understated due to employment figures reported as FTEs rather than number of positions.

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Community Profiles

To examine the impact of co-operatives on communities in Saskatchewan,

researchers interviewed community and co-operative leaders in four distinct

geographical regions —the southwest, westcentral, northeast, and northcentral parts of

the grainbelt. These areas were chosen in order to obtain a broad overview of the province

and to obtain samples that reflect different climatic conditions and resource bases. The

responses to these interviews have been coded into eight interrelated areas, corresponding

roughly to the conceptual points of view outlined in the literature review (Appendix B).

An outline of the people interviewed in these communities is provided in Appendix C.

Southwest Area of the Grainbelt

Researchers chose five communities in the southwest portion of the grainbelt for an indepth

analysis—the same communities examined in the 1991 study. The villages around

these communities are small (less than a hundred people), reflecting the relatively low

population density in this part of the province. * All five belong to the Minimum Convenience

category described in Appendix A. The dominant economic activity in these

communities is grain production, although livestock production, which twenty years ago

was much more prominent, does play a role in the areas near the United States border.

In all five communities, the local retail co-operative and/or credit union is almost the

only commercial business in town besides the elevators and the post office. More specifically,

all communities had a local retail co-op, and two had a local credit union. All the

co-operatives handled bulk fuel and some small hardware; one of them also handled food.

* See Jack Stabler, “Trade Centre Evolution in the Great Plains,” Journal of Regional Science, 27, no. 2 (1987): 225–44.

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One community has a community-owned foodstore, which, while not strictly a co-op,

has many of the same characteristics. There is no other formalized co-operative activity.

In terms of other amenities, two of the communities have a church, one has a school,

two have recreational facilities (both of which are community run), and one has a hotel.

All the communities have some sort of service organization, such as the Lions Club.

Despite the lack of economic activity, all the towns are well-maintained, with populations

consisting primarily of retirees, some local farmers, and those employed in the

towns’ businesses and services.

The communities have changed since 1991. One of them lost its school, while two

others have either lost or are in the process of losing their elevators. Population has fallen

and very little in the way of new business operations has been created. Farm size has continued

to grow, and as in other parts of the province, people in a number of communities

are actively examining the possibility of building large-scale hog-production facilities.

All the communities have retained the co-operatives that existed in 1991, although

the credit union in one place has amalgamated with a similar operation in a town twenty

miles away. In addition, a local credit union opened a new branch in a village near these

communities when the bank decided to close its doors.

The Social and Economic Role of Co-operatives

Competitive Goods and Services

In the 1991 study, there was a strong sense that the co-operatives and credit unions in all

five communities provided service and competitive prices that other businesses were not

willing or able to provide. Although the people interviewed for the current study felt their

co-ops at times still played this role, they also said that prices, particularly for fuel, would

not likely increase if their co-operative disappeared.

Part of the reason for this might be that in the last year, an independent fuel supplier

has entered the local market, selling fuel on essentially a wholesale basis to farmers willing

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to pay cash for large volumes. The interviewees did acknowledge that the wholesale prices

were available only to large-volume buyers, and that the loss of their co-op might force

groups of two or three farmers to join together to build small bulk-fuel facilities. This

would allow smaller farmers to buy fuel in large volumes and also to meet what many

believe will be more stringent environmental regulations regarding on-farm storage.

As in 1991, residents were concerned that while the co-op provides a wide spectrum

of goods and charges the same prices to all members, private competitors often limit their

business to fuel and oil, and frequently provide lower prices to their larger customers.

Despite the small size of the co-ops, however, members have a wide range of goods available

to them. This level of service is made possible in spite of—or perhaps because of

the fact that most of them hold relatively little inventory. Instead, members place orders

for things they would like. By relying on a daily bus schedule, the ability of Federated

Co-operatives Limited (FCL) to wholesale a wide range of items, and the ability to order

wholesale from other suppliers, local co-operatives are able to operate what one group

referred to as a “just-in-time” inventory system that sometimes even delivers larger goods

to people’s farms.

This latter point is extremely important, since one of the things cited repeatedly was

the convenience provided by the local co-op. The view is reflected in comments such as:

• “The price of groceries would be the same, but the travel costs would increase.

We’d be less able to get groceries on short notice.”

• “The co-op is handy. The down time [to drive to a larger centre] is large for a

$50 item.”

• “The co-op gives us the ability to drive [to town to pick up a part] three times

a day.”

The importance of service is also highlighted by the fact that one of the co-operatives

has moved into a newly constructed building since 1991. The new building reflects the

fact that the manager has been able to increase business over the last few years, largely because

of his willingness to do special orders for people. Increased business has led to the

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hiring of extra staff, thereby allowing the manager to remain in the store full time, which

in turn has generated more business because people are assured of getting good service

when they come in.

In summary, the overall impression is that co-op members and others in the communities

are pleased with their co-operatives. In addition to the comments above, further

evidence for this view is provided by the fact that in recent years, all of the co-operatives

have maintained their sales and net-saving positions. While there are a number of factors

at work here (see the section below on management and local control), a necessary condition

is the continued patronage of the members.

Provision of Goods and Services Not Otherwise Provided

Among the five local retail co-operatives considered, the notion that co-ops are capable of

supplying goods and services that otherwise would not be provided received considerable

support. One aspect of this was presented in the previous section, which noted that all the

co-operatives regularly ordered items in response to specific requests.

A better example, however, is the case cited in the 1991 study of a co-operative taking

over the retail postal outlet in town. That co-op is continuing to run the post office. The

formation of a community grocery store after the failure of the privately owned establishment

is an additional illustration of the role a community or co-operative can play in providing

nonprofitable goods and services (this case was also cited in the 1991 study).

Despite the importance of the co-op or credit union providing these services, all those

interviewed stressed the fact that if their co-op or credit union disappeared, the likelihood

of it being replaced would be very low. Simply put, the cost of starting a new co-op would

be prohibitive. Interviewees also noted, however, that the chance of this happening is low

because of the service these organizations provide.

Strengthening the Regional Economy

As was the case in 1991, the co-operatives and credit unions in the communities surveyed

have not actively considered additional types of economic activity that might be carried

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out in their communities. As mentioned above, a number of people are exploring new

hog-feeding facilities, but this is on an individual basis rather than on behalf of the co-op

or its members.

The activities that have been undertaken have generally been on a reactive basis, or

have been provided by others from outside the local area. One of the communities that

lost its elevator felt that perhaps a bulk loading facility should be investigated; interestingly,

a similar view was expressed in 1991. This community also thought that the co-op

might follow the lead of Naicam Co-op and examine custom combining. One of the

other communities had adopted a new program introduced by Credit Union Central,

whereby cattle producers could retain ownership of their cattle through the feeding stage.

Building and Sustaining Community

Co-operatives and credit unions play an important role in the social cohesiveness of the

communities examined. At the same time, it was evident that the community nature of a

centre was key to the success of the co-ops and credit unions it supports. This interrelationship

was revealed in the following comments:

• “I enjoy going and talking to the local elevator agent. I wouldn’t travel to

[location X, which has a large inland terminal] to do that.”

• “[Our village] would be dead if the co-op and credit union were gone.”

• “If the co-op were not here, we would have to travel elsewhere, which would

take us out of the community.”

• “[The co-op] is coffee row.”

• “Eventually that community cohesiveness just fades away if businesses

move away.”

• “The co-op is the community. Without a school or elevator, [there] is

nothing else.”

Given the dominant role that co-operatives play in these communities, it is not surprising

that the co-op, credit union, or local store is essential to maintaining community

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cohesiveness. The importance of the co-operative or credit union, however, appears to go

beyond simply being another business. The comments above indicate that community is

valued and that co-operatives play a role in maintaining a sense of community. They also

indicate that community is viewed as part of everyday life, of people interacting with each

other as they go about their regular business.

Networking and Diversity

Although not explored in 1991, networking was examined in considerable detail for the

current study. With a few exceptions, members generally do not see their co-op as a

source of networking possibilities. The co-op is occasionally used to find information

on the price or quality of a product, or as a local network to find someone or to relay a

message. Beyond these limited cases, however, most people increasingly look outside the

community for connections, or use specialized networks within the community—such as

marketing clubs—for connections and information related to specific items or issues. The

co-op is not seen as providing the same types of connections as those offered by other networks

available.

As with the general membership, board members generally do not see the co-operative

network as a source of ideas and possibilities either, reporting that they rarely meet with

their counterparts on other co-ops except at annual conventions, and then it is only with

the delegates.

In contrast, co-op managers appear to have developed extensive networks among

their colleagues, and more importantly, with suppliers from FCL and elsewhere. These

networks are used to order things requested by members and to keep track of the competition.

At a more general level, those interviewed indicated that the declining population

greatly reduced the possibilities for connections with other people in the community. As

was pointed out in “Networks: A Conceptual Model” (pages 34–36), changes in the number

of nodes in a network have a nonlinear effect on the number of connections. As the

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population of a region falls, therefore, the number of networking possibilities is expected

to fall by an even greater amount.

Given that sustainable communities require strong networks, declining rural populations

are likely to severely limit the ability of these communities to maintain themselves.

This lack of community network possibilities is also consistent with the observation that

people are being spread too thinly in leadership positions; that people do not have sufficient

time to serve on all the voluntary organizations in the community.

Diversity and conflict are two other issues that were not examined in 1991. Everyone

interviewed agreed that diversity within their community and co-operative was important,

and indicated that their co-op or credit union had been trying to encourage a wider mix

in terms of age, gender, occupation (e.g., nonfarmers), and geographical location. The

reasons cited included a need for new perspectives and better representation of customer

groups.

In particular, several people indicated that their co-op had been trying to get more

women on the board. While some boards had been successful, others identified a number

of obstacles, including the suggestion that women sometimes do not believe they are

adding anything new to a board, and the fact that couples often divide up their community

responsibilities, with the women taking on roles in other organizations.

On the question of conflict and the manner in which it is handled, most people were

unable to accurately describe how their community managed difficult situations, and

none had set procedures for dealing with them. When descriptions did emerge, no patterns

were discernible. One community said people did not usually discuss issues of conflict

openly, while another reported that there was often a heated discussion, after which

the minority went along with what the majority had decided. One example described

people listening to concerns and then changing their minds to accommodate them; and

another, a situation in which conflicts between younger and older members led to a group

within the community folding. One group linked conflict to a fear of change, saying,

“Things are changing; people are looking at new ideas.”

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The issue of conflict also had a spill-over to leadership, with two group noting that

criticism was crippling leadership within their community. Nobody was coming forward

to run things because they felt they could not make an impact.

Community versus Self-Interest

The importance of community in the lives of people can be further explored by examining

the degree to which residents act in their own self-interest or in the interest of

their community. The notion that people see a connection between community and selfinterest

is found in comments such as:

• “I’m willing to pay a little more to have service.”

• “Big guys don’t shop locally. Never did, but there are now more of them.”

• “If we don’t use [the co-op], it won’t be here.”

• “People are pressured economically. [They] do look for better prices. [They]

don’t buy at the co-op sometimes.”

• “There was a lot more socializing thirty or forty years ago than now, visiting

neighbours. People have got too busy [today].”

• “With the elevator gone, loyalties go—[people] go to the place where the best

price is.”

One of the themes running through these comments is that people appear to realize

that the decisions they make have an effect on their community, and that they can control

this to some, albeit a limited, degree. There were concerns about larger farmers being

more interested in the best price; that farms are becoming bigger and that with a loss of

population, keeping a sense of community is becoming more and more difficult. In short,

those interviewed felt that community was important, but that it was increasingly difficult

to maintain.

Local Control

The issue of local control is closely related to that of management. As in 1991, one of the

themes that emerged from the interviews was the importance of retaining local control. It

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was strongly felt that the local board and management understand the local individuals

and situations; that local control provides a sense of doing something that is meaningful;

and that local control leads to greater loyalty.

A number of co-operative leaders felt that their co-ops were still in business because

they had resisted take-over attempts in the past. References were made to problems dealing

with FCL ten to twenty years ago, and how FCL’s philosophy has shifted more recently

towards a view that locals should remain autonomous.

While the importance of local control was highlighted, the communities also noted

that in all co-operatives, local control was increasingly being given up. As one group commented,

this loss of local control may be hampering efforts to find board members: “Why

use valuable time to solve things when decisions are made elsewhere?”

A number of the groups pointed out that a loss of autonomy was sometimes beneficial,

indicating that FCL’s bulk facility had been good for their co-ops, and also that

credit union amalgamation had been a good thing where it had occurred: “[Although we]

lost a day of service, the service on the other days is better.” The communities also spoke

positively about FCL’s role in providing a wide range of goods and services at competitive

prices, and the importance of patronage payments from FCL in enhancing the co-op’s

bottom line. At the same time, the question was raised as to whether FCL’s ability to

return such dividends was the result of paying too much for fuel in the first place.

As was pointed out in 1991, these comments say as much about community cohesiveness

and the ability to attract and hire good managers as they do about the benefits of

local control per se. As one group put it, “[The] decision is still at the local level to give

up being independent.” Although this is difficult to quantify, the impression is that those

co-ops that had exerted local control in this type of situation had less of a sense that their

control was being eroded.

Management and Leadership

As in 1991, all of the communities surveyed emphasized the importance of good management.

As someone noted, “Every business is vulnerable to having a poor staff. We have

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been really fortunate to have a good manager.” In another community the comment was,

“Good managers are hard to find. [It] is hard to pay them what they’re worth.”

While these remarks appear to place a lot of the responsibility for the success of the

co-operative or credit union on its manager, all the communities recognized that the responsibility

for getting good managers rested with the co-op boards.

• “The more [the board] puts in, the more [it] gets out. [The] board needs

to pay attention to issues, to be in close touch. If things [are] going well,

the board often lays off.”

• “Management tends to be less interested in how business is doing. This is

a board responsibility. The board does have a vested interest.”

Interviewees clearly understood that the goal of management was not necessarily to

have the co-op make large returns. As was pointed out in one community, “[The] top

goal [is] not necessarily making top profit. Rather, [the goal is] providing whatever services

members need. [Do] not take too big a margin, but be safe and be able to give

something back.”

These comments clearly indicate the intricacies involved in managing a co-op, even

in smaller centres. Managers may have their own objectives, a situation that would require

constant monitoring by the board. At the same time, the directives given to managers are

not simple ones such as “maximize earnings.” Instead, a good manager must balance

financial viability with service to members.

When the question of leadership was raised, all the groups interviewed expressed

concerns about getting people to run for elected positions in their communities. The

common sentiment was that falling populations were making it increasingly difficult

to get people to serve on boards. The view was often expressed that people were being

spread too thinly; that people did not have the time to serve on all the boards that are

required to keep a community running. Comments were also raised about the complaints

and criticism often directed towards leaders, which were discouraging people from becoming

involved.

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The issue of time is especially important, given the consolidations in areas such as

health care and education, since travel time to meetings is often substantial. One group

noted that organizations are relying less on volunteers and doing more on a paid basis.

Different kinds of leadership are required. At one level, people need to take the lead in

voicing opinions, which can be difficult given that people no longer seem to even have the

time to talk to each other. Business skills are required to start new enterprises and keep existing

ones operating. One comment suggested that what is really needed are followers—

people who will take on the task of doing things. This group has dwindled in size, however,

given the drop in population. People also need the ability to recognize what can and

cannot be done. As the “Leadership Development Survey” ( page 158) shows, the degree

of control people feel they have is also a factor in the types of leadership roles they may

be willing to undertake.

Westcentral Area of the Grainbelt

Researchers studied three communities in this area. Two of the towns are medium-sized

(with populations of approximately 2,500), and belong to the Partial Shopping Centre

category. The third is very small (fewer than 25 people) and belongs to the Minimum

Convenience category (see Appendix A).

In the smallest community, a consumer co-operative provides the only services available.

These are fairly extensive, ranging from farm inputs to groceries, with a minimal

inventory of latter items. There is also a curling rink and community hall, both organized

as co-operatives, although since the 1991 study, the curling rink has not operated on a

regular basis and has recently been advertised for sale.

The larger towns offer most producer and consumer services, with some variety and

brand-name choice. The co-operatives are very strong in one town, with the consumer

co-operative offering a full range of services, the credit union holding most of the financial

business (despite the presence of three other financial institutions), and the large agricultural

co-operative operating a farm service centre and elevators. In addition, the commu-

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nity has a co-operative farmers’ market and a co-operative Small Business Loans Association.

The town has held its own since the previous study, and while some businesses have

closed, others have opened to replace them. The town’s school-age population has declined,

but numbers remain up as a result of children being bussed in from surrounding

communities whose schools have recently closed. The consumer co-operative is doing very

well, having paid down the majority of the debt incurred in previous years. Since the 1991

study, the credit union has grown through amalgamation from a single-district credit

union to include branches in ten communities.

While the other town does not have a consumer co-op (it closed in the 1970s), it does

have a strong credit union and the agricultural co-operative’s elevators. And although the

co-operative health clinic is no longer operating (it was one of the first formed during the

early 1960s), a community clinic association remains in existence. The community has

experienced a period of stability and some growth since the previous study, and as it is

located on both CP and CN mainlines, the railroad is a major employment provider. The

ag co-op is a minority shareholder in a large malt plant, which has undergone significant

expansions in the past five years. In addition to the direct employment provided, many

spin-off businesses, such as trucking, have developed. A local consortium opened a greenhouse,

which operates independently from the malt plant, but benefits from its access to

lower natural gas charges.

The Social and Economic Role of Co-operatives

Competitive Goods and Services

In the more isolated areas of the province, co-operatives have a significant role to play in

the provision of services at competitive prices. The one very small community included in

this group relies solely on the consumer co-operative for services, and it manages to provide

a full range of them despite the small size of the outlet. Orders can be placed for any

product carried through the co-operative wholesaler, and the prices are competitive. To

remain competitive with other co-ops and independents in the trading area, however, the

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co-op has had to become increasingly aggressive since the last study in providing services

related to farm inputs. To do this, it has added custom chemical application, and entered

into an alliance with two other retail co-ops to build a jointly owned bulk-fuel plant.

Along with the near annual need to upgrade facilities, stringent environmental regulations

are stressing the already resource-short co-operative with the requirement to do daily

bulk-tank testing and file yet more paperwork. Despite the added difficulties, the co-op

has managed to remain strong, and has also been able to pay out significant patronage

dividends (as high as 7 percent) over the past seven years.

In the larger communities, the presence of the co-operatives is useful in providing

competition for the privately owned companies, but they are not guaranteed loyalty if

their pricing is out of line.

The credit union in one of the larger towns has been adding services, while the three

banks have been consolidating theirs—reducing the number of tellers, removing general

managers, and shifting their focus to electronic services. Reaction to the reduced access is

reflected in the following account of customer dissatisfaction:

• “The owner of a small business in town, which is located across the street

from the [name of] bank, phoned the bank to make an inquiry regarding an

account. She soon realized that she was not talking to a staff person at the

bank but to someone in the bank’s call centre, located in the south of the

province. After repeated delays as she went through one security clearance

after another, she finally walked across the street in disgust to obtain the

answer to her question.”

The credit union is seen as an important part of this community, holding half of the

deposit market in town.

• “The closure of the credit union would be a tremendous blow to the

community, far greater than the loss of the consumer co-op.”

Unlike the banks, the credit unions will not “do deals,” as it is not part of their philosophy.

And although they may have lost somewhat in mortgage lending because if this,

they have held their position in agricultural lending, maintaining 50 percent of the market

in this area.

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Similarly, the agricultural co-operative is an integral part of the community. Although

some members were upset with its decision to sell shares, many remain loyal.

The credit union has expanded substantially in one of the larger centres. The amalgamation

is the result of negotiations and discussions among five rural credit unions faced

with the long-term prospect of reduced influence and reduced access to financial services.

Members were demanding more services and better prices, and were willing to travel

greater distances to obtain them. The management and boards of the credit unions involved

determined that amalgamation was the most effective way to meet their objectives—enhanced

service delivery, wider geographic area for attracting members, elimination

of unnecessary duplication, economies of scale, access to specialized services—

while at the same time preserving the essential elements of autonomy.

Provision of Goods and Services Not Otherwise Provided

In the smallest community, it makes economic sense for the co-op to provide services that

profit-oriented businesses cannot. The decision regarding what services to provide, however,

often presents a major challenge for the co-operative, as evidenced by the following

comment:

• “It is difficult to decide what services we keep. For example, the amount of gas

pumped is so low that the revenue is less than the cost of insurance. However,

would people keep coming without a full range of services?”

• “We are trying to maintain service without just looking at the bottom line. We

will continue to carry groceries even though it creates a lot of work for staff.”

In a very small community, such as the one in this study, the provision of credit is

also important, but the co-operative may find itself assuming the role of a bank, in many

instances without desiring to do so, and at great risk to the viability of the organization.

• “A lot of younger members have used the store as their bank.”

A commitment to community may also lead to investment in facilities that might not

be considered if the bottom line were the only criteria. When the original curling rink in

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the small centre burned in the early 1980s, for example, local citizens decided to rebuild,

using insurance money and available grants, despite concerns regarding declining population.

As community-based businesses, co-operatives face increasing pressure during tough

economic times to provide goods and services off-loaded by noncommunity-based enterprises.

The credit unions in the two larger communities indicated that they are feeling

the pressure to take over farm and commercial debt, almost as a show of good faith to

the community. This can be a double-edged sword, for although they do want to show

support for the community, they do not want to increase risk to their depositors.

• “During the late 1980s, the banks really tightened up on their lending in the

agriculture sector. The credit union gained farm accounts during this period.

People who had never dealt with the credit union—who probably did not believe

in the credit union—came over because the credit union would deal with

them when the banks would not.”

Co-operatives and credit unions are also willing to provide service to communities

when the private sector leaves:

• “We have just opened a branch in [adjacent community]. When the Royal

Bank left town, the community wanted a financial institution. They approached

some of the other banks, but only the credit union agreed. We have

approached it very cautiously, and not with a full range of services to begin

with. As a result, we have gained four hundred memberships, in most cases

new to the credit union.”

Aided by the innovative use of technology such as ATMs, MemberCard debit cards,

RFI Terminals, MasterCard payment cards, and Teleservice, the amalgamated credit

union has been successful in continuing to provide service to ten communities, some of

which are remote and not serviced by any other financial institutions.

Strengthening the Regional Economy

The credit unions in both of the larger communities have been involved in supporting the

development of new enterprises. One of them is willing to provide financing to riskier

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ventures if there is job creation attached, such as supporting the initial start-up of a

local greenhouse. Although the venture failed, new owners have recently put it back

into production.

• “The greenhouse was seen as a risk, but a good venture for the town nonetheless.

We are also willing to lend money to local investors for several hog

barns going up in the area.”

The hog barns, some of which are initiatives of a subsidiary of the agricultural co-op,

have sparked a lot of controversy:

• “The credit union was fortunate to have gotten its branch up and running

prior to the controversy hitting its highest point. The community split could

have prevented the credit union from getting established.”

• “This kind of community investment is good—it’s a win-win for everyone.

The barns are going up, employing all the local people who want to work

there. Businesses benefit, the town gets lots of jobs, housing construction is

booming, the hotels and restaurants are full.”

• “When I look at my fertilizer bill, the input savings from having a hog barn

on my property looks very attractive. Not only that, but it creates jobs—my

daughter is working at one now. I would like to initiate a project, but a barn

that was proposed east of here was met with such resistance by my neighbours

that I do not want to run the risk of turning them against me.”

• “The hog barns will go in anyway. Who do we want to own them? If

Heartland did not, outside investors and corporations would be doing it.”

The amalgamated credit union, newly formed since the previous study, identified

community development as a component of their mission statement, and have made a

commitment to taking a leadership role in promoting social and economic community

development. On the social side, they contributed in excess of $33,000 in one year to

various community-based events in their ten communities, ranging from scholarships

and community fundraising events to social and sporting activities.

On the economic side, they provided partial financing to a seniors’ housing complex

and initiated a community development process in three branch areas, which will involve

the three village councils and their rural municipal council working together to formulate

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a partnership plan. In the past year, the credit union invested $50,000 in the Value Added

Industries Community Bond Corporation, with the credit union president and two staff

members sitting as members of the board.

Networking and Diversity

Size of community seems to have an influence on the perceived social role of co-operatives

and the contribution they make to community cohesiveness. In the smallest of the

communities examined, where there had been a long history of co-operative community

activity, the store was more than just a point of business; it was the social and economic

hub of the community. Residents went there to pick up their mail, have coffee, and catch

up on community news or plan events:

• “People come to the store to talk.”

• “I go to the store to talk to Shirley.”

• “[Community name] is a unique place—it’s a social place for people to go.

Even if [the manager] left, the store would survive. FCL told us that the store

would not survive without [an earlier manager]. He left and we found another

one. When [the next one] left, we were told again it would not survive, but it

did. Membership loyalty to the store is very strong.”

It was felt that the community was friendlier and more generous because of the cooperatives.

The consumer co-op staff is willing to provide good customer service, even

though there seems to be insufficient time to deal with all aspects of the business. Those

who sit on the board—among whom there are both male and female leaders—are now

third-generation co-op members, whose parents and grandparents founded the institutions.

The decline of population has made it difficult to recruit volunteers for the store

and recreation co-op boards, especially when many families have members who work off

the farm. Despite the challenges, however, people continue to feel that it is important to

participate in the co-operatives:

• “I would not sit on the board if it were not for a sense of community.”

• “People sit on the board because they think they can still make a difference.”

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But in spite of the willingness to continue to serve, the impact of networks in decline

is nevertheless beginning to show. The community has had difficulty finding volunteers

to operate the recreational facilities; usage has not covered the costs of operating the ice

plant; and it is difficult to raise money for needed renovations to the hall. The number

of children in the neighbourhood has declined dramatically, and for the families who remain,

the focal point for most activities is the next town, which has the school and more

modern recreational facilities. It is uncertain, in fact, how many community activities will

occur in the co-operative hall or rink in the future.

A former ag co-op delegate added his observations regarding the impact of community

networks in decline.

• “In the past few years, there have been very few people living in the district

during the winter. Last year we lost six families on one road because they

moved into [the larger community] for October to April. People move to be

closer to school and so their children can participate in school activities and

sports. As a result, there is no one around to support community events.”

In the larger centres, the majority of co-op community activities are of the good

corporate citizen nature. They support local clubs and events financially, and also participate

in parades and other community events. The manager of one credit union co-chaired

a series of Unity Meetings with the local MLA. He is particularly supportive of his staff’s

participation, encouraging each employee to take a special “Community Day,” which

allows them to work at a cause of their choice in the community.

Running a branch operation means providing financial contributions and support to

branch communities, as well as to the central credit union’s locality.

• “When we opened our branch in [name of community], we were asked if we

would sponsor a scholarship to the school there, and we agreed. We have always

been involved in their community fair and will continue to be involved

in other activities.”

Finding people to run for the co-op boards and local committees is not quite as difficult

in the larger communities, but it may be more of a challenge to add diversity to the

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composition of the boards. The ag co-op delegate mentioned that they had had success in

attracting younger farmers to the local committees in one of the towns, although women

were severely under-represented. And because they had successfully begun a number of

specialty committees—such as livestock—they were considering organizing a women’s

committee. In another community, a former delegate indicated that he had replaced a

woman when he assumed his position, but that the overall percentage of women within

the delegate body was very low. He also wondered if women would ever be elected into

board positions, since men whose ideas were inconsistent with the traditional view were

considered to have little hope of being accepted by the old guard.

In one community, the credit union currently had two women on the board, out of a

total of ten; there had been three previously, but the board was having difficulty recruiting

more. In the other large community, the board had only one female member, out of a

total of nine. Women’s participation was very high on the advisory committees associated

with the nine branches, however, ranging from 40 to 100 percent.

Linkages

The credit union in one of the larger towns is currently investigating its first partnership

with credit unions in other communities.

• “We have given management the go-ahead to investigate where they might

begin to work together to provide services. We felt we had a lot in common—

our credit unions are similar in size, similar communities, problems, philosophies

of our boards.”

And while formal partnerships with other co-ops have not been part of the credit

union tradition in this town, they have provided banking services and financing for the

consumer co-op and to members wanting to invest in some of the hog barns, as well as

meeting space for the agricultural co-op committee.

The amalgamated credit union is a strong example of how to build successful linkages.

The negotiations among the five founding credit unions were approached from the perspective

of a partnership, the assumption being that they were coming together in order to

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succeed in the future. The new credit union has continued this pattern, participating in

the CCA Linkage Partnership Program with a credit union in Ghana; a partnership with

seven other credit unions in an Automotive Dealer Finance Program; and a similar

arrangement with Co-operative Trust Company of Canada to deliver Estate Planning

Services.

In the smallest community, where the presence of co-operatives is strongly felt, it was

recognized that co-ops do have an obligation to pursue social change. Study participants

could see the potential for co-operatives to provide health, child, and elder care.

Community versus Self-Interest

In the smallest community, there was no doubt that the residents made a concerted effort

to support the local store rather than taking their business out of the community. The

same could not be said, however, of the local curling rink, which had been rebuilt in the

early 1980s, complete with artificial ice. Over the past seven years, the high cost of operating

the plant and a scarcity of volunteers to run the facility, coupled with insufficient support

in the community, have made it difficult for the recreation co-op to justify putting in

the ice. The board has only recently come to the difficult decision of putting the rink up

for sale. Although it was suggested that the decline in the local population was the major

factor, it would appear that while people are willing to support local economic services to

keep them alive, they are not as willing to patronize local recreational services if there are

others within driving distance. And whereas the community could once count on many

driving from the next town to participate in bonspiels or attend the annual fowl supper,

it is difficult to get anyone out these days.

• “There are not as many kids in the neighbourhood. People are willing to drive

much farther, and the focus is [the larger adjacent community].”

• “Interest in the community is starting to disappear; you can’t plan an event

without knowing first what is happening in [adjacent town].”

Issues such as whether or not to provide volume discounts have caused the retail

board to examine its co-operative values and the importance of loyalty. While board

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members feel that their policy of not providing volume discounts may have cost them

some larger customers, they have concluded that these people were likely not loyal co-op

members to begin with, since their interest was in receiving an immediate price reduction.

The larger communities studied in this area seemed to be fighting a losing battle with

commitment to community, with people apparently willing to drive to nearby centres for

almost any good or service. Lack of visibility in larger communities may encourage people

to shop around for better prices, whether it be for grain delivery, farm inputs, or grocery

items. Deregulation of the transportation system has provided even greater incentive for

producers to utilize trucking companies to ship their grain wherever freight rates might be

lower, or the protein premium higher. And if you don’t haul your own grain, where you

take your business is even less visible to the community, and therefore far less subject to

community pressures to patronize local facilities.

In response to the effects of deregulation (rail-line abandonment, elevator closures),

some producers are attempting to establish short-line railroads and producer-owned terminals.

The unfortunate outcome is often direct competition with the co-operative that

the producers feel has abandoned them.

A broader definition of community, with wider-ranging community boundaries, may

be required in the future to maintain a focus on community benefit. The members of the

amalgamated credit union, for example, have been encouraged to work for the benefit of

the region, not just their home community.

Local Control

Local autonomy is a fiercely protected notion in the smallest community’s co-operative.

Members successfully fought amalgamation with a larger store nearby and attribute their

current strength to that accomplishment. In the previous study, the board expressed concern

about pressure from the co-operative wholesaler to amalgamate their bulk-fuel operation

with two other communities (both of which would be more than twenty miles away)

in order to meet new federal environmental regulations. At the time, residents felt that

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this would remove an element of control over their local operations, making them less

responsive to the concerns of the immediate community. Experience during the past

seven years has confirmed their initial fear that it would be a mistake; they have lost some

control. The wholesaler is currently promoting the extension of volume discounts, an

issue to which the current board is philosophically opposed.

• “We have had to fight to retain control on many issues, from where the

manager’s house was built to the purchase of a fuel truck.”

• “We take pride in our independence and try to tailor our services to the

community, but we do have constraints.”

The desire for local control provides evidence that co-operatives can serve their

communities better than businesses with an outside orientation, such as branches of the

larger chains. Comments such as the following support this:

• “There are rumours that the [bank] will be gone soon. They have reduced

their hours by half, to one hour per day, and gone to a system where callers

get [a distant location] when they call. Customers are feeling the loss of

personal contact/control.”

A representative of the credit union commented that to serve the community in the

way that is expected, co-operatives have to stay small enough to retain contact with the

local community. He described a situation in which a credit union in an adjacent community

had amalgamated with its counterparts in a number of other centres. Members

in one of the branch communities indicated to him that initially there had been a lot of

dissatisfaction with the amalgamation—a feeling that the quality of service had declined

and that the community was removed from decision making. While recognizing that the

desire for autonomy could go too far—such as credit unions that would rather die than

amalgamate—branches at the same time needed to feel that there was a genuine representativeness

about the democratic structure. The branch in question does not have formal

regional representation, but one member of the board is from that district, and the board

is looking for another. And although the annual meeting is held in the central community,

an information meeting is held in the branch community the night before.

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Representatives of the amalgamated credit union indicated that a significant motivation

for the amalgamation had been the fear that urban credit unions would swallow up

the small rural branches, or draw the rural business if those credit unions were unable to

provide the services demanded by their members. There was also a concern that urban

credit unions would not be sufficiently responsive to the unique needs of the farm members.

Amalgamation of a number of larger rural credit unions, they felt, would preserve

the strength of the rural system that served farm needs so well. In doing this, however,

preserving the autonomy of the initiating communities was considered critical, and could

be partially achieved by establishing a new credit union, with a new name and a new

board. The establishment of advisory committees at each of the branch locations was also

critical, and the intention is to have regional representation in the future.

• “Our member control structure must be such that when local conditions

vary, local solutions apply. Members must have access to identifiable

representation.”

Management and Leadership

Examples point repeatedly to the importance of good management, both paid and

volunteer, to the success of co-operatives. In the smallest of the communities studied,

the current manager is highly educated and skilled. Management within the wholesaler

would like to move him up in the system, but with family ties, he wants to stay in the

community. Those interviewed felt the store would not run nearly as well without him;

he provides not only services through the store, but also farm-management advice and

assistance, and since the previous study, is also operating the custom chemical applicator.

• “[Manager’s name] is the store. He has really good product knowledge.

If members didn’t get the service they do, the store wouldn’t survive.”

• “[Manager’s name] is quite bottom-line oriented, while at the same time

very compassionate toward the members. He deals only with FCL.”

Both management and board were identified as contributing equally to the success of

the credit union in one of the larger centres:

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• “You need good management to provide sound financial advice, but you also

need management that is committed to the ideals of co-operatives. If you

don’t have managers who believe in co-op principles, the whole system gets

in trouble. However, you also need boards who believe in the principles and

who represent the best interests of communities.”

The ability of management to demonstrate vision and leadership was essential to the

successful amalgamation of five credit unions into one. The managers understood that

credit unions in the area would have to co-operate more effectively in the future if they

wanted to survive. In addition, management’s willingness to stand out of the way, and in

two cases, to tender resignations in the best interest of the total system, allowed the amalgamation

process to occur.

Finding volunteers to serve on the three co-op boards is a real challenge in the smallest

community. While some attribute it to lack of numbers, others suggest that many simply

are not willing to take on the responsibility.

• “Volunteers are lacking. There are just not enough families to carry the load.”

• “There have been empty spots on boards for two years now, and no one will

do it.”

And even when volunteers do come forward, many feel that today’s board members

have a different attitude from previous generations.

• “It takes a lot of time and energy to keep voluntary organizations going. The

older generation were the “pioneers”—they were willing to take the time.”

Despite these concerns, people do feel that this generation has important contributions

to make:

• “The members of the co-op board are younger, more progressive, prepared to

take some risk. They were willing to invest in custom application equipment

to keep their co-op competitive.”

Serving on a co-operative board in a small community brings with it the usual stresses

and the potential for conflict, when close neighbours or family members both sit on the

board and work within the co-op. Two family members who at different times had

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chaired the board indicated that they had had to resign because it was so difficult to keep

business separate from their personal life. They also commented that it is difficult to be

tough with accounts receivable when those in arrears are neighbours or friends.

Supporting board members by providing leadership training was identified as an important

contribution to the success of the co-operative. Although his committee members

had not taken advantage of the many leadership development opportunities provided by

the ag co-op, one delegate interviewed for the study was proud that one of his committees

had been chosen as a pilot for a committee revitalization initiative. These pilots will focus

on seven aspects considered essential to member involvement: membership, policy and

strategic guidance, marketing information exchange, image, problem solving, leadership

development, and business development.

In the community where credit union amalgamation occurred, the board clearly

understands the requirement to show leadership and vision. Two of the initiating boards

did just that when they concluded that they would have to look beyond their communities

towards the district and region for long-term viability.

Northeast Area of the Grainbelt

Researchers studied three communities in the northeast grainbelt. The largest—a Complete

Shopping Centre—is a city with a population of just over 6,000; the second, a town

of just over 900, is a Full Convenience Centre; and the smallest, a village of approximately

550, is a Minimum Convenience Centre. By comparison, the 1991 study examined two

Complete Shopping Centres and one Full Convenience Centre.

The city (the Complete Shopping Centre) offers most producer and consumer

services, complete with variety and brand-name choice. The co-operatives have a strong

presence in this community. The consumer co-op is well established, providing a full

range of services, with the exception of furniture, and anchors a large shopping centre.

The credit union holds a strong share of the financial market in the community, and is

continuing to provide a full range of services, while adding branches since last studied in

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1991. A large agricultural co-operative maintains a farm service centre in addition to

elevator facilities, and the community is also home to a Small Business Loans Association

(SBLA).

The town (the Full Convenience Centre) provides consumers with groceries (two

stores), gasoline (four outlets), lodging (two facilities), meals (three outlets), financial

services (two), and a variety of other smaller service industries. Farm equipment (although

only one brand name), bulk fuel, and building materials are all available to producers.

The town also supports a number of small-scale industries. The co-operatives have a

strong presence in this community as well, with a credit union, an SBLA, a retail cooperative

offering a full range of services (with the exception of clothing and furniture),

and the agricultural co-op’s elevator. Since the previous study, the credit union has become

a branch of its counterpart in the Complete Shopping Centre. The community

has a school, three churches, senior citizen housing, two community halls, a skating and

curling rink, and a number of active service clubs.

The village (the Minimum Convenience Centre) is unlike many in this category due

to the presence of a large farm-equipment manufacturer, which provides employment to

a radius of approximately thirty miles. The community has a higher average income level

than the province as a whole, and identifies its most pressing problem as providing sufficient

housing to all those who would like to live there. The ethnicity of the region is predominantly

French, and the village has only a Catholic church. This centre provides a

fairly good cross-section of services, including an SBLA, and has a school, a bowling alley,

community hall, and seniors’ centre. Although it could not be considered a strong “co-op

community” historically, the co-operatives have come to play an important role, with the

consumer co-op now being the only grocery store in town, and the credit union the only

financial institution. Both have renovated their facilities in the past two years.

The Social and Economic Role of Co-operatives

The northeast area is home to one of the oldest co-operative associations in the province.

It was formed in 1914 as a Grain Growers’ Association, in response to perceived inequities

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in treatment as both consumers and producers. The association began with shipments of

twine and later brought in apples, sugar, and flour by the barrel. Shortly afterwards, members

started a livestock pool to ship to Winnipeg, when drovers of the day did not seem to

be offering fair prices for cattle and pigs. They added oil in 1921 and groceries in 1925.

Competitive Goods and Services

The consumer co-operative in the largest centre is still strong, but it is being increasingly

challenged on many fronts. In the seven years since it was last studied, the grocery section

has been expanded substantially; at the same time, the furniture and hardware section of

the store was cut back to the point of being almost eliminated. Additional services such as

custom combining and spraying have been introduced to remain competitive in the agro

market. The additions and modifications to services seem to be working, and in the previous

year, the co-op made its first general dividend payout. A recent expansion by a national

grocery chain, however, accompanied by an aggressive challenge for market share,

has resulted in the worst year for sales in the history of the co-op. The manager seemed

confident they would weather the storm, but recognized that the co-op would have to

make careful strategic decisions regarding pricing and provision of services in order to do

so. Their ability to provide credit, and other programs directed toward “accommodating

people,” he felt, were integral to holding market share, while also attracting new members,

in particular young couples and families in more difficult financial circumstances. One of

the board members indicated that the challenge for market share, combined with the need

to maintain a presence in the competitive ag-services market, has made the bottom line

“more and increasingly important.” The co-op’s strategy, he said, “would have to be more

aggressive, offering competitive prices and good service, while creating strength in areas of

traditional advantage.”

While competition was a factor in the medium-sized community, there was a difference

in the way in which the role of co-operatives was perceived. Residents felt that the

presence of the co-operatives strengthened their community, but were concerned at the

same time that they not undercut other similar businesses.

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• “The board of directors has said be aggressive, but don’t hurt any of the other

businesses.”

• “We like the competition and don’t want to shut down [the owner of the

private grocery store]. He opens on Sunday; we chose Thursday night.”

• “We consider [the Complete Shopping Centre] and [the Primary Wholesale-

Retail Centre] to be the competition, not our local town.”

The consumer co-operative did not seem to be as concerned about competing with

the local ag co-op elevator, however, as it did with other privately owned businesses in

the town, and as a consequence, the level of competition between the two was very high.

The consumer co-op successfully introduced a variety of custom services for its farmsupply

customers, and was looking to add more, as well as offering a complete range of

farm inputs. It is in good financial shape, making regular patronage dividend payments

of up to 5 percent. Since the previous study, the grocery store has been renovated with

the addition of a garden centre, and the home centre has been expanded and made more

“woman friendly.” In addition, an agro centre with a resident agronomist has been developed,

and staff are currently considering the use of satellite technology to provide soiltesting

services to members.

In the smallest of the communities, a member of the credit union board remarked,

“The pressure is on. We have to offer services [to remain competitive].”

Provision of Goods and Services Not Otherwise Provided

Two of the co-operatives studied in this area and two of the credit unions had branch

operations in other smaller or adjacent communities. Some of the branches had been

acquired when outlying communities approached the larger to amalgamate in order to

provide more services, or to assist in maintaining the service in the smaller community.

Others had been established by the central co-operative or credit union at the request of

the smaller community when a privately owned business had closed, leaving them with

reduced or no services. Notably, in the seven years since the previous study, the larger

credit union had been adding services, while the banks (three) had been consolidating,

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reducing the number of tellers, removing general managers, and shifting from personal

to electronic services. And like the larger credit union, the smaller one had acquired a

branch in an adjacent community, which had formed their credit union when the bank

moved out.

The branch relationship cast most of the co-operatives in the role of having to consider

the needs of not only their immediate community but also those of communities as

far as twenty miles away. This added another dimension to the decision-making criteria

for the co-operative organizations. The way in which the branches were treated seemed to

be related to the overall philosophy of the board and management. As shown by the following

comments, some saw the branches not as a burden, but as an opportunity to assist

the other communities and to provide services that would otherwise not be there:

• “We didn’t know what to do—buy out the competition or sell to the

competition. The dilemma is, do we drive them out of business, or do we

abandon the community? As long as the wholesaler is profitable, thanks to

our patronage refund, we can run [the branch] at break-even.”

And while the decision whether to open or close a branch presented a significant

dilemma, it was recognized that there were also spin-off effects for the central community:

We chose to open the cafeteria to try to turn the store around, which was losing

money, rather than close the store. It looks good now. We have later hours of

opening for the supper hour and the cafeteria seems to have brought in new business.

We decided not to close the branch because our community would not have

likely picked up their business. The local people would have just got mad and

taken their business elsewhere.

This particular branch operation is well maintained, with new siding and fresh paint,

symbolic of the commitment of the larger co-operative to the members of the smaller

community.

Strengthening the Regional Economy

The level of involvement in community-development initiatives seems to be a product

of the viability of the co-operative or credit union and the level of energy of the local

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management, both paid and volunteer. Since the previous study was conducted, Regional

Economic Development Authorities (REDAs) have formed around the province, and

many, although not all, of the co-operatives and credit unions have become involved

through their management and boards.

The relationship with branch organizations means that financial contributions and

support are made to all communities, including the central one. Most of the co-operative

organizations involve themselves in the community by donating to local clubs, providing

scholarships and bursaries, and purchasing 4-H calves.

As noted in the 1991 study, staff involvement in community events was also seen as

an important contribution to the viability of the community. In the medium-sized centre

in particular, there was a great deal of emphasis placed on the involvement of the credit

union staff in community events. As one manager said, “We want to employ staff who

are prepared to participate in the community. The board emphasizes community involvement

and will pay for staff memberships in local clubs.” In the other communities, those

interviewed talked proudly of their volunteer commitments, and among board members

in particular, it seemed to be an indication of a good manager if he or she were actively

involved in community events.

Networking and Diversity

The composition of the elected boards in the study did not completely reflect the

diversity in the membership, although involving younger members was identified as a

priority, and some emphasis was placed on increasing the representation of women and

visible minorities. Most of the co-operatives included in the study had one or two women

on the board. One of the consumer co-operatives works closely with an adjacent band

council, and the manager is willing to go out of his way to encourage business, carrying

accounts for the band, and also assisting them to establish and operate their own store.

A member of the band council was elected to the board for a term. Terms are unlimited,

however, which means that turnover tends to be low, offering few opportunities to include

under-represented groups.

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Management of the co-ops and credit unions did not reflect the diversity in the

community either. Although two branch credit unions had women managers, this was

not the case in any of the consumer co-ops, large or small.

Linkages

In the history of most co-operatives, you will find stories regarding the role of one in

assisting the development of another. It is common to hear that the credit union started

in the store:

• “The manager ran the credit union out of a shoe box in his desk drawer.”

• “The credit union’s original safe is sitting in the corner of my [store

manager’s] office.”

With that history, it is not surprising that alliances with other co-operatives to provide

new services, or to enhance the ability to maintain those already in existence, has again

been identified as a necessity for survival, as well as an opportunity for innovation.

Using a new model, one of the credit unions was the first to develop a dealer finance

centre, with participating dealerships in three communities. When a customer applies for

financing at the dealership, the actual loan is processed through the credit union, which

then sells the loan back to the customer’s local credit union. The first credit union is reimbursed

for associated costs, while the local one actually administers the loan. The intent

of the program is to co-operate with other credit unions, rather than take business away

from them. The same credit union has joined with its counterparts in three other communities

to share costs so they can offer teleservice to their membership.

Another credit union in the northeast cluster of communities established a subsidiary

that offers innovative leasing arrangements around the province for items such as office

equipment, commercial supplies, and even grain bins. Participating businesses call the

credit department in the branch that operates the service to make arrangements for the

lease. The branch then contacts a credit union in the business’s trading area and offers it

the opportunity to finance the loan (“buy back the paper”). If the local credit union

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declines, it is offered to another. As with the dealer financing centre, there is a sharing

of both cost and opportunity, while keeping business in local communities rather than

having it taken out of them. This same branch joins an adjacent, larger credit union to

provide loans to large hog producers in the area.

Size, as well as the interests of the manager and board, may be a factor in the decision

to engage in these kinds of collaborative partnerships. The consumer co-operative in the

largest community had entered into only one such alliance, and had turned down a request

by another consumer co-op to provide management services because they were, in

fact, in competition with each other. In this case, it was suggested that other initiatives,

such as the expansion of credit, were more important.

While joining with other same-sector co-ops to form federations for joint buying has

a long tradition within the co-operative system, alliances with co-ops outside the sector,

or with non–co-operatives, to provide new services or to enhance the ability to maintain

those existing, are new. Some of the most innovative of these have been sponsored by the

consumer co-operative in the medium-sized community.

One example is an alliance among the credit union, co-op, and town council, which

resulted in keeping a bakery that would otherwise have closed, leaving the credit union

with an unpaid mortgage, the town with one less business, and the community with one

less service. The partnership continued until another buyer for the bakery came to town,

and the business flourishes today.

The board and manager of this consumer co-op have adopted the philosophy that

whenever the membership wants a new service, the co-op will look around for partners

already in that business. The arrangement they propose is intended to increase service to

members, while not putting the co-op at risk, and at the same time, strengthening an

existing business. In the words of board members:

• “We don’t want to put anyone out of business.”

• “We need our community, and we need everyone in our community

to survive.”

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These collaborative arrangements have been made with other co-operatives—joint

buying of fertilizer with two other consumer co-ops in the northeast; a joint bulk plant

with four other consumer co-op associations south of the community—as well as with

privately owned businesses. There is a partnership with two local contractors who purchase

their lumber and other materials through the home centre to build Ready-to-Move

homes, which are jointly marketed by the co-op and the contractors. There is an alliance

with the John Deere company, which leases combines to the co-op that are then rented

on an hourly basis to members. And there is another alliance with a local independent

trucking firm to provide services to members. The manager indicated that the “co-op had

always gone to the credit union for financing.”

Links to co-operatives outside the province and the country have been critical to

the board’s willingness to become involved in many of the ventures identified above.

The board’s operations committee has travelled to Manitoba and Alberta to tour both

co-operatives and independent companies, as well as into the US to visit a large midwest

co-operative.

Community versus Self-Interest

Support for the co-operatives appeared to be strongest in the medium- and smaller-sized

communities considered in the study.

• “People are very loyal [members] and would not want to see the store closed.”

• “If the credit union closed, it would be a very big blow.”

Small communities constantly deal with the pull of larger centres, with many residents

torn between loyalty to the community and the financial benefits to their household:

• “We will drive into Saskatoon once a month to buy groceries and baby items

because the savings to us are very significant.”

At the same time, the membership expects the co-operatives and the credit unions to

support the community:

• “People expect the credit union to have community spirit.”

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Local Control

Local control was identified as central to co-operatives, but possible only if the co-op

itself is financially strong. The consumer co-op in the largest centre had recently celebrated

“paying off the mortgage” on the store location, and felt that with financial improvement,

it was able to be more independent from the wholesaler. At the same time,

members of the co-operative’s branch operation indicated that “many would like to see it

run as their own co-op.”

Local contact and control also seem to determine whether or not co-operatives and/

or credit unions are able to provide satisfactory services to their members. A credit union

board member described his experience with a centralized, prepackaged, financial planning

program offered by an adjacent, larger credit union:

• “It was set up too fast…members were not happy with the people who were

coming out; they had a poor rapport with the members.”

To address this problem, staff at the credit union are studying to be certified financial

planners themselves.

The desire for local control creates a dilemma for the co-operatives and credit unions

with branches in smaller communities. One of the credit unions had established a representative

structure to respect the need for local control of branches, and each community

held its own annual meeting. Others that did not have formalized representative structures

were faced with communities that were somewhat resentful about the insufficient

local control, and were threatening to align with another credit union.

Since the previous study, the credit union in the medium-sized town had amalgamated

with the one in the largest centre. The accompanying restructuring and job expansion

without corresponding wage increases had upset the staff. Although members enjoyed the

improvement in the variety of services provided, and perhaps made other gains in distancing

themselves from loan approvals (there was no longer a local credit committee), many

felt there was some loss of the “personal, local touch,” a potential problem, since it was

also noted that the “local touch was important to keep the loyalty” of the membership.

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The membership was also affected by the loss of autonomy and its own elected board,

which seemed to manifest itself as a loss in community identity.

• “We noticed that the [larger] credit union [smaller community] branch hats

were taken by the membership, but never worn. [The smaller community]

hats would have been worn.”

• “We had witnessed the backlash that came when [another community] took

down the [branch operation’s] old sign and erected the new sign. We decided

to leave the previous sign up and it seems to have helped the transition.”

It was generally felt that the local credit union had been able to retain its roots in the

community. This had been aided by the establishment of a three-member advisory committee

to the branch operation, and a board member elected to represent the community

to the larger credit union’s board.

There seemed to be dissatisfaction regarding loss of local control and input into the

large agricultural co-operative in the community. One of the elevators had burned since

the last study, and the local committee had lobbied hard for a high-through-put elevator.

Since the community was not on a main railway line, however, the co-operative agreed to

rebuild equivalent facilities, but not to upgrade them. The community took this as a lack

of commitment on the part of the co-operative. Loyalty to the agricultural co-operative

has been further eroded by subsequent changes in management and increased competition

from the local consumer co-operative.

Management and Leadership

All those interviewed agreed that management can make or break a co-operative or

credit union. And it is not just the ability of paid management that is key; the support

and attitude of the board are also vital. If the board membership is too old or has little

turnover and hence few new ideas, the co-operative can become stagnant. This may also

have a negative effect on the level of community participation in annual meetings and

other co-op–sponsored community events.

The reverse, of course, is also true. One co-operative with a particularly dynamic

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manager and supportive, younger board experienced high levels of community participation

in member appreciation events, and has brought in new customers not traditionally

co-op members. Their addition, however, has added a new dynamic

• “In [Complete Shopping Centre] co-op, the directors are Saskatchewan

Wheat Pool supporters who view them as sister co-ops. In the [Full Convenience

Centre] co-op, the directors are not Saskatchewan Wheat Pool

supporters and they do not view them as sister co-ops.”

In the past, excellent management in the medium-sized community contributed to

extremely high levels of through-put at the local co-operative elevator, despite the parent

co-operative’s unwillingness to upgrade to larger facilities. The manager was described as a

“tremendous builder,” who was involved in the volunteer fire department and many other

community activities. A recent change in management has left the co-operative vulnerable

to losing sales to the consumer co-operative in the area of farm inputs.

The importance of good management is further reflected in the following comment:

• “If the consumer co-operative lost the manager and a core of the board, much

of the business would unravel.”

Recruiting new board members is difficult, and co-operatives and credit unions find

it a particular challenge to attract young members to run for director’s positions.

• “We have fewer people, and our volunteers are being stretched.”

• “With two family members working outside the home, people no longer

have enough time for volunteer work.”

• “Some people are uncomfortable knowing about others’ personal business.”

Recruiting members who can make positive contributions to the board is also a

challenge. One former board member of the medium-sized consumer co-op said:

• “Co-ops have not attracted knowledgeable and capable people who are able

to turn around co-ops and credit unions and differentiate them from other

businesses. Members today are removed from the reasons that the co-operatives

were formed, and do not understand what loyal members and co-ops

can do together.”

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Northcentral Parkland Area

This study site is a regional service and administrative centre. Its economy is based on a

growing resident population, a large trading area encompassing surrounding rural communities,

and the resource-based industries of the region, including agriculture, mining,

forestry, and tourism. The settlement is a Secondary Wholesale-Retail Centre according

to the functional groupings described in Appendix A, and is the largest and most urban

community included in this report. It was not part of the 1991 study.

An important health, education, and commercial service centre, it also benefits from

considerable employment generated by federal, provincial, regional, municipal, and

aboriginal agencies. The people in the region use it for shopping, as a service centre, and

for cultural and recreational purposes. It is also a gateway community for people and

goods moving into and out of the North, giving organizations operating out of the town

effective links with the social and economic life of a large hinterland area. The community

has a significant representation of aboriginal peoples among its residents, and strong ties

to reserves and other native population centres.

Co-operatives have an important presence in this community, even though it is a large

centre with a wide range of businesses and organizations. The consumer co-operative is

substantial and provides a wide range of durable goods in addition to the typical array of

products offered by a supermarket. The credit union has increased its range of services

and has been renewing itself through the development of new financial products and new

markets. The agricultural co-operative has a service centre on the outskirts of the community,

and has recently added a number of new facilities. There are a range of community

service co-operatives active in child care, health services, and housing.

The Social and Economic Role of Co-operatives

Competitive Goods and Services

Co-operatives serving retail and wholesale markets, or providing financial services, are

operating here in a competitive and expanding market that has attracted a number of

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new entrants, as well as expansion or reinvestment by existing businesses. In such a context,

co-operatives add to the competitive character of local markets by competing on

some combination of service, price, and quality. Moreover, they may do so in a manner

that increases economic multipliers and perhaps also the social benefits associated with

commercial activities.

Co-operatives in this location have generally maintained or increased the volume of

their business in recent years. This reflects several underlying factors. First, as mentioned,

co-operatives in this gateway community have benefited from growth in the local population

and market. Second, they have benefited from the consolidation of wholesale, retail,

and service activities, along with population, into larger towns and urban centres. This

process, in which some co-operative organizations have participated more directly than

others, provides increased volume to outlets in business centres, which are net beneficiaries

of the spatial reorganization of the provincial economy. Third, the co-operatives

in this location have been able to inspire member loyalty and to attract new members by

providing a mix of economic and less tangible benefits. This includes a range of goods

and services that meet the needs of members in a generally cost-competitive fashion.

For example, in the ten-year period leading up to 1997, the credit union saw its share

of the market grow from an initial 20 percent to more than 30 percent. It serves an even

larger portion of the financial services sector market for automobile finance, and offers

specialized services to the commercial and agricultural sectors. Moreover, it has been

developing a working relationship with tribal councils, bands, and individual aboriginal

clients, a focus that predates by several years the banking community initiatives in

response to the Treaty Lands Entitlement (TLE) settlements.

Provision of Goods and Services Not Otherwise Provided

In a commercial and administrative centre such as this study site, it is less obvious that

certain goods and services would not be as readily available locally without the presence

of co-operatives or credit unions. Nevertheless, co-operatives do add to the selection and

variety of goods available locally, and in some cases handle lines or products that are

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exclusive to the sector or particular outlet. The retail co-operative in this community

handles a wide array of goods, including groceries, furniture, computers, building supplies,

custom-built homes, and farm supplies. Its branches in smaller communities also

offer many of these products and services. In the case of products not available in the

local outlet, rural members who shop in the larger centre still enjoy the equity allocation

benefits associated with co-operative membership.

The community and larger region both benefit from a number of co-operative initiatives

that provide services that would otherwise be unavailable or considerably more difficult

to obtain. Some of these are commercial, while others are in the areas of community,

social, and related personal services. Alone or in partnership with other organizations, for

example, co-operatives have been active and innovative in the provision of child-care and

health facilities, programs, and outreach. A small but significant step has been taken to

promote home ownership among low-income tenants using the co-operative model, and

a related project has been undertaken to provide training and self-employment opportunities

for people lacking attractive employment prospects. Moreover, the co-operatives

and credit unions based in the larger centre have been able to respond to requests from

outlying communities to help with the establishment of satellite service outlets offering a

quality and range of services that would otherwise be unavailable locally. This may include

credit union financial services as well as co-operative grocery, hardware, or gas

station operations. The consumer co-operative has invested in upgrading its branches in

smaller rural centres, even though some of these operations were losing money in 1980.

None of these outlets are now “actually losing money.” In some cases, the consumer

co-operative has opened branches after amalgamating with, or purchasing the assets of,

failing co-operatives in smaller centres.

Outreach to aboriginal peoples and communities is a particular example of an initiative

to offer services where none were formerly available, or to people who once faced

serious barriers in accessing such services. The credit union in this community has a long

history of liaison with aboriginal individuals and organizations, handling band accounts

and those of their corporate entities, and acting as a key lender for some important

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aboriginal development initiatives. Moreover, it has pioneered in delivering financial services

in remote locations and to individuals who have no prior experience using savings

and loans institutions. An aboriginal services manager, a native person with a strong background

in credit union operations, has put together training seminars and materials for

adults and for schools. These have been offered, at band invitation, on many area reserves.

When requested, the credit union has also arranged to offer on-reserve services, such as

cheque cashing, loan approvals, and new accounts. A full-service credit union agency outlet

opened recently in a remote northern community, with personnel on site able to offer

services in the local native language. The credit union is evaluating the prospects for similar

arrangements in several other small northern communities. Hiring aboriginal employees

has been a priority at new branches. The credit union board has also initiated a First

Nations advisory committee to provide input into its planning and evaluation activities.

One important aspect of providing goods or services not otherwise available is the

provision of market outlets for local producers and artisans. Where these involve goods or

services appropriate to local markets, this also gives community members the option to

buy locally and to reinforce the community multiplier. The consumer co-operative relies

on its co-operative wholesaler for the majority of stocked goods. Nevertheless, it has a

policy of local procurement where possible, stocking locally grown bedding plants, some

produce, wild rice, fish, and beef jerky, and handling local lumber when price and quality

are competitive. It also solicits tenders only from local tradespeople and contractors when

refurbishing or upgrading facilities.

The local co-operative health centre has adopted a holistic, individual and community

approach to “enabling wellness,” and has initiated or collaborated on many programs not

previously available in the region. Its board and staff have been innovators with respect to

home care, van service and exercise classes for seniors, health education and community

outreach, pregnancy support, dental services, physiotherapy, acupuncture, nutrition counselling,

and counselling for women who have been victims of family violence. The health

care co-operative provides many of these services at its main site and at two satellite rural

community locations—both full-convenience centres. It is also considering opening an

additional urban site in a location owned by the regional tribal council.

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In conjunction with community groups, the health co-operative has initiated a

dental project, which as of now screens children at three schools and provides dental

services to those requiring treatment. The program includes nutrition education and has

been embraced as a community project. The centre also started a pregnancy support and

breast-feeding project, and has collaborated with the local health board to embark upon a

program that will deal with family violence in the community. In addition, the centre has

hired native outreach health workers to take requested programming onto reserves in the

surrounding region.

As in many Saskatchewan communities, co-operatives here provide a large share of

the formal child-care services available. A number of these centres offer an integrated

program for special needs children, using specially trained staff and consultants. The cooperative

day-care organizations in this community have a working relationship with

schools and aboriginal head-start programs. Working under considerable financial constraint,

the co-operatives provide meals and snacks to the children in their care. Some

have also attempted to provide an expanded range of culturally sensitive programming.

Strengthening the Regional Economy

This community is the site of an important initiative designed to make home ownership

a reality for low-income tenants. Many tenants are trapped paying high rents for small

houses that do not meet safety codes. Home ownership has numerous benefits, including

greater neighbourhood and family stability, and lower turnover in area schools—with

associated benefits for students and staff. The idea of a housing co-operative developed

over several years in discussions that involved a concerned real estate agent, municipal

officials, housing authority staff, and staff from several provincial government departments

and agencies, plus the local credit union. A housing co-operative was formed in

1996.

Credit union staff serve on the co-operative’s advisory committee and have helped to

arrange a preapproved mortgage of $750,000. The credit union provides additional administrative

support to the new co-operative, offering financial counselling to co-op members,

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and handling bills from suppliers and tradespeople. It has also made a $10,000 donation

and waived the usual mortgage fees.

Once accepted as members of the co-operative, a family selects its own home from

among houses for sale, and the house is purchased by the co-operative. The group works

together to renovate the house, and the resulting market equity reduces the need for a

large down payment. Members must agree to work ten hours on each of ten houses in

addition to their own. Each family signs a lease-to-purchase agreement with the cooperative,

and ownership is transferred to the family when the mortgage is paid off

through monthly payments. Participants thus gain a home, renovation skills, and a

strong sense of community.

Many area businesses have provided donations or free services. An insurance cooperative,

for example, provides coverage at favourable rates. Even so, undertaking

enough renovations to cover 25 percent of the purchase price has proved difficult. The

Saskatchewan Department of Municipal Government has recently partnered with the

co-operative to provide partially forgivable, interest-free loans for down payments up to

20 percent of the purchase price. The municipality tops up this program to a maximum of

5 percent of the purchase price. This new arrangement applies to low-income families, but

the credit union and the housing co-operative have worked out a parallel arrangement for

families with incomes above the stipulated level. By late 1997, fourteen families had purchased

houses as members of the new housing co-operative. The target for 1998 is to add

twenty-five more families. There are two hundred families on a waiting list to join.

In the words of one woman whose family now has its own home, thanks to the co-op:

• “Family life has changed. We are more of a family.”

• “Houses have brought couples together, changed relationships.”

• “We sawed and hammered together…you can always depend on co-op

members.”

• “The feeling that you are finally getting control once in your life—people

are desperate.”

• “Working on the houses has changed the vision of gender relations in both

men and women.”

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Many of the organizers and members of this co-operative have come together on another

project—an economic development corporation that would facilitate the establishment

of another housing co-operative, this one for single-parent families. The women

involved would undertake the major part of the renovation work and receive additional

training, with the goal of eventually starting their own co-operative home renovation

and material recycling business.

The credit union is also a partner in a new initiative to support women in business

training, micro-credit, and small-business start-ups. This project involves several community

and government organizations, including the credit union, the chamber of

commerce, the local REDA, the YWCA, SIAST, New Careers, and the Department of

Social Services. The project is young but has already spawned several proposals and new

businesses. In the words of the program co-ordinator:

• “Credit union managers have been very accessible, flexible, and open with

their lending criteria.”

• “An advantage of working with a credit union is that they don’t have to go to

head office for clearance on projects…which always distances it a great deal.”

Building and Sustaining Community

Many co-operative managers in this community have taken as axiomatic the need for new

approaches to social and economic development, and for related innovations in their own

organizations. In some instances, this is put into operation by funding and supporting

community activities whenever called upon—a frequent occurrence in any business organization

in the 1990s, but especially common if your organization is a co-operative and

has a reputation for providing support. In other co-operatives, this orientation was more

central to the initial conception, and has received new emphasis in recent years. In these

organizations, community development activities are a primary focus of directors and

managers.

The main credit union in this location has received citations and awards for its support

of community projects. It provides “community-builder accounts,” with free cheques

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and services for qualified community organizations. According to its own audit of community

activities, its staff contributed more than thirteen hundred hours in support of

120 volunteer groups in 1996. This included eighteen hundred hours during credit union

business hours, translating into more than $30,000 in salaries. A little more than half of

these paid hours went towards committees, charities, and community groups with which

staff were personally involved. The balance went to credit union community initiatives.

In addition to volunteer and monetary contributions, the credit union makes its facilities

and equipment available to numerous organizations. According to its own documents, in

addition to visibility and recognition for the credit union and its employees, it takes a

broad view of other potential benefits:

• “Community involvement also enhances the skills, confidence, and selffulfilment

of employees both through interaction with members of the

community and as a result of the positions held on boards and functions

performed within those community groups.”

The credit union makes a conscious effort to set high standards for community involvement,

recognizing a “bandwagon effect” when other businesses see the good will and

exposure it generates. The credit union has also tried to recruit other area co-operatives to

help set up a foundation for an endowment to be used in support of community projects

in the region. The concept being explored includes “living trusts” and other vehicles for

investing in community causes.

The management of the retail co-operative frequently makes donations or hosts

pancake breakfasts to support causes and organizations as diverse as the Kidney Foundation;

the Cancer Society; the Wildlife Federation; the local co-operative health centre

volunteers; a local nursing home; a hospital in a northern community served by a branch

outlet; youth soccer, hockey, baseball, and softball; area powwows; an area youth centre;

4-H youth club activities; scholarships and awards at local schools; and scholarships and

equipment for the co-op youth camp. The local staff of the agricultural co-operative likewise

use discretionary funds to support a plethora of community projects, especially those

involving youth, agriculture, or co-operatives. They have, for example, sponsored the

Native Winter Games, and one of the co-operative’s managers has served as chair of the

local REDA.

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Networking and Diversity

A manager of the consumer co-operative stressed the importance of belonging to a federation

of co-operatives in terms of the resources and technical support this provides. The

co-op sector offers training opportunities and seminars in a number of areas; auditors

from the wholesale co-operative provide on-the-job training; the senior co-operative also

provides technical advice regarding computer equipment, energy consumption, and other

aspects of maintaining or surpassing current industry standards. Moreover, membership

in the co-operative network allows the managers of this retail outlet to consult regularly

with other co-op managers, and to join with other co-operative retails in the region to

take advantage of volume purchase opportunities—sharing a semiload of product, for

example.

In turn, this retail co-operative has used its size and technical expertise to stabilize or

rebuild the half-dozen smaller retail operations it has taken over as branches in outlying

communities. Partnership with the larger entity has made it possible to make investments

that would otherwise have been too risky. The larger retail co-op is also working with several

other smaller retail co-ops in the region, providing management, accounting, or fueldelivery

services. The manager interviewed observed that there are mutual benefits to the

close working relations with rural branches and other co-operatives in smaller centres:

• “We are doing our utmost to keep these communities alive.”

• “Our presence encourages these people to shop co-op when they come

to town.”

In terms of networking and network strengthening, this retail co-operative has made

a point of keeping its own financial business within the co-op sector by working closely

with the local credit union. This collaboration includes a credit plan for consumers purchasing

major household items.

The credit union is also involved in networking relationships through its affiliations

with other credit unions and Credit Union Central. Its managers are in close contact with

their counterparts in other credit unions in the province, and have explored the potential

of joint ventures with several of them. Moreover, the credit union in this community

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maintains service outlets in at least a half-dozen small rural communities. Liaison

activities with aboriginal communities have already been discussed.

The social and economic impacts of co-operative organizations include aspects of

relations between various social subgroups distinguishable in terms of race, ethnicity,

social class, gender, age, and urban or rural residence. There are also related dynamics

with respect to youth employment, the equitable integration of women into the workforce

and community leadership roles, and the sustainability of community economic

development initiatives. Some of these issues were obvious before the interviews; others

came to light in the process of the fieldwork.

Local Control

The agricultural co-operative in this city is involved in major restructuring of grain delivery

and service centres throughout the region, and has also undertaken a number of new

initiatives to diversify the agricultural economy. This has met with mixed response from

both members and nonmembers. The co-operative has sought local support and investment

for its new developments, but has not pushed such projects where support is absent

or weak. In response to local concerns, moreover, it has recently instituted a moratorium

on the demolition of facilities closed as part of the reorganization plan—unless the local

co-operative committee and community want them removed. Where there is local interest

in developing alternative uses—as a canola collection point, for example, or as an elevator

handling certified organic product—the co-operative will provide both technical support

and assistance in evaluating the feasibility of the business plan.

As discussed above and below, the retail co-operative in this urban community has

taken over the operations of several co-op outlets in smaller centres, outlets that were

failing financially or in need of renewal. The larger co-operative partner has attempted to

preserve a certain degree of local autonomy and initiative. Local managers make their own

decisions about supporting community activities, and local managers and elected officials

are involved in strategic decisions.

• “Each branch is involved in its own community projects, scholarship

programs, and related activities.”

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Management and Leadership

Some of the co-operatives in this community have taken important steps to develop their

own managers and employees. At one, managers who complete university courses relevant

to their work are compensated for 75 percent of the tuition cost. They are encouraged to

join community organizations and can be reimbursed for annual fees, and they can also

come to the co-operative for financial or in-kind support of these community activities.

At the health co-operative, managers and staff are involved in training programs concerned

with co-op organizations and membership. Almost all the staff are members and

can therefore take part in general meetings and vote. One staff member sits on the board

of directors and participates in all deliberations except where there is a conflict of interest,

as in salary discussions. The centre has an employment equity program, and by paying

attention to where and how positions are advertised, has been able to surpass target ratios

for Saskatchewan and the local community with respect to employment of aboriginal

staff, about 17 percent of whom are self-identified as such.

Some of the co-operatives in this study have actively engaged in member and staff

education regarding the principles of co-operative organization and business, and also

the skills needed for sustainable economic development at the turn of the century. They

have self-consciously recognized and embraced the newest principle adopted by the International

Co-operative Alliance—concern for community. At the credit union, compensation

for staff and managers includes bonuses for community involvements.

Several of the co-operatives in this community sponsor co-operative youth camps.

Almost all have taken steps to develop the capacities of key staff and managers. Some

have introduced people with no previous experience to the intricacies of running their

own organization. In the housing co-operative, for example, all members serve on at

least one committee.

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Leadership

Development Survey

Introduction

A

n additional objective of the overall study was to identify the ways in which involvement

with co-operatives might be related to current and past involvement

in community leadership. To this end, researchers examined the demographic characteristics

of leaders, their experiences as youths and adults in a variety of social, religious,

and educational programs, and the involvement of their parents in positions of community

leadership. In each instance, questions were asked to determine where links to cooperatives

and credit unions might be found.

To gather the data, researchers conducted a random survey of households in the

southern half of the province, which resulted in four hundred completed surveys. The

sample included individuals who were asked to self-identify as holding currently or in the

past, either a formal or informal position of leadership. As illustrated in table 1, 83 percent

self-identified as holding positions of formal leadership, while the remaining 17 percent

Table 1

Number

of Respondents %

Formal leadership position 332 83

Informal leader 68 17

Total completed surveys 400 100

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indicated that they considered themselves to be holding positions of informal leadership

within the community.

Formal leadership was defined as any type of board or executive position with any

kind of organization, volunteer board, or community group. The definition of informal

leadership was left somewhat more open-ended. Asked if they regularly provided leadership

through a number of actions, respondents most frequently indicated that they provided

informal leadership through raising questions in a meeting, offering opinions or

advising elected board members, and helping to organize community events (see table 2).

Table 2: Informal leadership (respondents could check more than one category)

Responded Percentage

Yes of Informal (68)

Act as a sounding board for spouse

in a formal leadership position 8 11.8

Volunteer to serve on committees 39 57.4

Raise questions in a meeting 54 80.6

Help to organize events in your community 39 57.4

Offer opinions or advise elected board members 43 63.2

Serve as an unofficial secretary for an organization 14 20.6

Other 3 4.4

Demographics

Formal leaders were more likely to be male, aged 36–45, well educated, and earning a

middle range of income. They were most frequently retired, farmer/ranchers, in clerical,

teaching, and management positions. They were more likely to live on a farm or community

of less than 5,000, and to have lived in that same community for more than eleven

years, having been born in Saskatchewan.

Informal leaders were more likely to be female, aged 25–45, well educated, earning a

middle range of income. They were most frequently employed in clerical or management

positions, or as homemakers. The majority resided in communities with populations

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larger than 10,000, having lived in those communities up to forty years, with a portion

of them less than five years. As with the formal leaders, the majority had been born in

Saskatchewan.

Formal Leadership

An examination of the types of organizations with which self-identified formal leaders

were involved revealed that the majority of activity was in community groups and boards

(78.5 percent), followed at some distance by service organizations (28 percent). Twenty

percent of respondents held elected positions in municipal government and co-operative

organizations, while a small number (2 and 3, respectively) were former members of the

provincial and federal legislatures.

Table 4: Positions of leadership current and past (respondents could belong to more than

one category)

Number

Percentage

of Respondents of Formal (332)

Federal or provincial government 10 3.0

Municipal government 67 20.3

Community groups or boards 260 78.5

Service organizations 92 27.9

Sports clubs 149 45.0

Agricultural organizations 42 12.8

Co-op boards, CU Boards

Sask. Wheat Pool/other co-ops 67 20.4

Other 2 .6

N = 332

Table 5: Elected positions currently or formerly held at the federal or provincial level

(respondents could belong to more than one category)

Currently Formerly Total % of 332

Provincial—MLA 0 2 2

Federal—MP 0 3 3

Other 2 4 6

Total 2 9 11 3.3

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Table 3: Leadership status, by demographics

Formal leaders = 332

Informal leaders = 68

Gender Age (missing 1) Education level (missing 8) Household income level (missing 31)

F M 25–35 36–45 46–55 56–65 >65 Some Compl. Tech. Some Compl. 20,000 40,000

HS HS School Univ. Univ. 60,000

Formal leader 159 173 45 108 74 46 58 48 71 59 53 93 27 107 94 81

Informal leader 46 22 19 24 14 7 4 11 14 16 12 15 9 20 14 17

Totals 205 195 64 132 88 53 62 59 85 75 65 108 36 127 108 98

Community size

Current residence Number of years in this community Where were you raised?

Farm 50,000 50 In In Outside

–5,000 –10,000 –50,000 Sask. Canada Canada

Formal leader 88 78 59 10 45 52 49 28 79 73 49 25 29 283 41 8

Informal leader 8 8 5 4 16 27 14 8 10 17 13 3 3 57 8 3

Totals 96 86 64 14 61 79 63 36 89 90 62 28 32 340 49 11

Occupation

Manage- Teach. Med. Trans- Constr. Manu. Cleric./ Farmer/ Public Home- Student Self- Retired Un- Other

ment & and and por- and sales/ rancher service maker employ employ

prof. related health tation process. service

Formal leader 35 35 29 10 6 5 41 54 8 26 2 15 62 3 1

Informal leader 10 7 6 1 3 12 4 2 11 2 3 5 1 1

Totals 45 42 35 11 6 8 53 58 10 37 4 18 67 4 2


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Table 6: Currently or formerly held an executive, board, or officer position in

co-operative organizations (respondents could check off more than one)

Currently Formerly Total

Consumer co-op 2 6 8

Credit union 4 13 17

Agricultural co-operatives 3 7 10

Preschool/daycare 0 3 3

Recreational 1 0 1

Other co-ops 10 30 40

Total 20 59 79

The primary interest for the purposes of this study was leadership within co-operative

organizations. The leaders who self-identified themselves represented the majority of the

provincial co-operatives. Table 7, on the facing page, provides a detailed description of the

co-operative leaders in the sample. The formal leaders were overwhelmingly male, and

found in two age groupings—either 36–55 or over 65. The majority had completed high

school, and some had technical or university education. Most had middle income levels,

and indicated either farming or retirement as their occupation. The majority lived on

farms or in communities of less than 1,000 population, having lived there for between

eleven and thirty years.

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Table 7: Co-operative leadership positions held, by demographics

n = 67 Gender Age Education level Household income level

M F 25–35 36–45 46–55 56–65 >65 Some Compl. Tech. Some Compl. 20,000 40,000

HS HS School Univ. Univ. 60,000

Consumer co-ops 8 0 1 1 1 1 4 3 3 0 0 2 0 6 2 0

Credit unions 14 2 0 1 7 3 5 4 1 1 3 7 2 4 5 4

Agricultural co-ops 7 3 0 4 2 3 1 3 1 2 1 2 0 3 4 3

Preschool/daycare 0 3 0 3 0 0 0 0 1 0 1 1 0 1 0 2

Recreational 0 1 0 0 1 0 0 0 0 0 0 1 0 0 1 0

Other co-op board 33 9 5 10 12 2 13 11 11 7 3 8 2 13 11 12

Community size

Current residence Number of years in this community Where were you raised?

Farm 50,000 50 In In Outside

–5,000 –10,000 –50,000 Sask. Canada Canada

Consumer co-ops 4 3 1 0 0 0 0 1 2 2 1 0 2 8 0 0

Credit unions 7 4 2 0 3 0 0 0 4 4 2 2 4 15 1 0

Agricultural co-ops 6 3 1 0 0 0 1 1 2 1 0 2 3 8 2 0

Preschool/daycare 1 0 0 0 0 2 1 1 1 0 0 0 0 2 1 0

Recreational 1 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0

Other co-op board 23 9 6 1 1 2 5 3 9 12 4 3 6 36 3 1

Occupation

Manage- Teach. Med. Trans- Constr. Manu. Cleric./ Farmer/ Public Home- Student Self- Retired Un- Other

ment & and and por- and sales/ rancher service maker employ employ

prof. related health tation process. service

Consumer co-ops 1 0 0 0 0 0 1 3 0 0 0 0 3 0 0

Credit unions 2 1 1 0 0 0 1 6 0 0 0 0 5 0 0

Agricultural co-ops 0 1 1 2 0 0 0 6 0 0 0 0 0 0 0

Preschool/daycare 1 0 0 0 0 0 2 0 0 0 0 0 0 0 0

Recreational 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0

Other co-op board 2 2 2 1 1 1 2 17 2 0 0 1 11 0 0


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Influence of Co-operative Involvement and Education

The following section compares the experiential and educational backgrounds of formal

leaders of co-operative organizations as compared to formal leaders in non–co-operative

organizations. While both groups indicated that involvement in church groups was the

most frequent experience of youth, more co-op leaders were likely to have been involved

with 4-H and specific co-operative youth programs, as well as with cubs or boy scouts

(table 8). Leaders in non–co-operatives rated these youth experiences as somewhat more

important in terms of leadership development (table 9).

Table 8: Involvement in programs as a child or youth (respondents could belong to more

than one group)

Total %Total Co-op % Co-op

Surveys Surveys Leaders Leaders

Brownies/guides 75 18.8 4 6.0

Cubs/boy scouts 66 16.5 13 19.4

Cadets 39 9.8 5 7.5

Church groups 237 59.4 35 52.2

Explorers/CGIT 55 13.8 4 6.0

Co-operative youth seminars 27 6.8 5 7.6

Co-op schools (forerunner to 16 4.0 6 9.0

above)

4-H 104 26.0 26 38.8

Other 116 29.0 9 13.4

n = 400 n = 67

Table 9: Importance of membership in youth programs to leadership development

Very

Unimportant

Very

Important

1 2 3 4 5 Mean Stand.

Dev.

Importance of membership

total surveys (n = 328) 10.1 11.6 24.7 29.3 24.4 3.46 1.26

Importance of membership

to co-op leaders (n = 54) 9.3 9.3 29.6 37.0 14.8 3.39 1.14

Missing from total surveys—72

Missing from co-op leaders—13

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Respondents were asked to identify the kinds of co-operative-sponsored programs

they had attended as an adult. Not surprisingly, formal leaders of co-ops indicated the

highest level of attendance (table 10), and ranked these programs as having greater importance

in their development as a leader as compared to the general sample of respondents

(table 12). Although most respondents had not been involved in co-operative-sponsored

programs, 48 percent of those responding to this question indicated that co-op programs

had led to greater leadership involvement in community organizations, just slightly lower

than the ranking indicated by co-op leaders (table 13). Within both groups, co-operatives

are perceived as providing moderate to a great deal of support for leadership development

in communities (table 14).

Table 10: Involvement as an adult in co-operative-sponsored or -supported programs (respondents could

indicate more than one answer)

Total % Total Co-op % Co-op

Surveys Surveys Leaders Leaders

Co-operative Women’s Guild

leadership school 1 .3 0 0

Co-operative Union of Canada’s

correspondence courses 5 1.3 1 1.5

Western Co-op College programs 12 3.0 2 3.0

Directors schools 9 2.3 7 10.4

Board training through

the local co-operative 23 5.8 18 26.9

Informal training and education

through board membership 49 12.3 23 34.3

Management training through

employment with a co-op 17 4.3 8 11.9

Saskatchewan Wheat Pool

Young Couples Club 2 .5 2 3.0

Other 7 1.75 2 3.0

n = 400 n = 67

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Table 11: Holds position of leadership, by attendance at co-operative-sponsored programs

Organizations Where Respondent Fills a Leadership Position

Attended co-operative-sponsored

Co-op boards

or -supported programs Fed/prov. Municipal Community Service Sports Agricultural CU boards, SWP,

or organizations government government groups/boards organizations clubs organizations other co-ops

Co-op Women’s Guild 0 0 1 0 0 0 0

leadership schools

Co-op Union of Canada’s 0 1 3 0 2 2 1

correspondence courses

Western Co-op College 1 2 7 5 2 3 2

programs

Directors schools 0 3 5 3 4 2 7

Board training through co-op 0 7 15 6 12 7 18

Informal training through 1 14 37 13 25 9 23

board membership

Management training through 0 4 12 5 7 2 8

co-op employment

Sask. Wheat Pool 0 0 1 0 1 1 2

Young Couples Club

n = 10 n = 67 n = 260 n = 92 n = 149 n = 42 n = 67


L EADERSHIP D EVELOPMENT S URVEY •

A closer examination of the type of co-operative-sponsored training experienced by

formal leaders in the many different organizations represented in the sample indicated

that it is primarily current and previous leaders within co-op organizations who have

benefited from these programs (table 11). However, the influence of this training is also

found among a fairly high percentage (25 percent) of leaders in municipal government

and agricultural organizations.

Table 12: Importance of membership in co-operative programs to leadership development

Total % Co-op %

Surveys of 82 Leaders of 34

1 Unimportant 5 6.1 2 5.9

2 13 15.9 3 8.8

3 19 23.2 8 23.5

4 30 36.6 14 41.2

5 Important 5 18.3 7 20.6

Total 82 100.0 34 100.0

Missing from total surveys—318

Missing from co-op leadership—33

Mean—3.45

Stand. Dev.—1.15

Mean—3.62

Stand. Dev.—1.10

Table 13: Overall, considering all the various co-operative programs and organizations

that you have been a part of, did these memberships

Total % Co-op %

Surveys of 82 Leaders of 34

Lead to greater leadership

involvement in community organizations 40 48.8 17 50.0

Have little impact on subsequent

community leadership involvements 26 31.7 13 38.2

Unable to determine 16 19.5 4 11.8

Total 82 100.0 34 100.0

Missing from total surveys—318

Missing from co-op leadership—33

Mean—1.71 Mean —1.62

Stand. Dev.—.78

Stand. Dev.—.70

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Table 14: To what degree do co-operatives currently support leadership development in

communit(ies)?

Total % Co-op %

Surveys of 80 Leaders of 33

1 Little support 9 11.3 4 12.1

2 9 11.3 4 12.1

3 26 32.5 9 27.3

4 19 23.8 8 24.2

5 Great deal of support 16 20.0 8 24.2

Total 79 100.0 33 100.0

Missing from total surveys—320

Missing from co-op leadership—34

Mean —3.30

Stand. Dev.—1.24

Mean—3.36

Stand. Dev.—1.32

Influence of Parental Involvement in Co-operatives and Community

Parental involvement in co-operatives and community organizations was also identified as

a factor in influencing the willingness of children to assume community leadership. More

co-op leaders than the general population indicated that their mother was a member of a

co-operative (table 15), a member of community groups in general (table 17), and on the

executive of community groups (table 18). A similar pattern was discovered with the

involvement of fathers of co-operative leaders (tables 19 to 22), with significantly higher

levels of involvement indicated by fathers in both co-operatives and community groups.

A more detailed breakdown by type of organization reinforces the importance of parental

involvement in all manner of community leadership (table 23).

Table 15: Mother a member or a board member of a co-operative organization

Total % Co-op %

Surveys of 397 Leaders of 67

Member 68 17.1 17 25.4

Not a member 329 82.9 50 74.6

Total 397 100.0 67 100.0

Missing from total surveys—3

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Table 16: Mother an officer of a co-operative organization

Total % Co-op %

Surveys of 396 Leaders of 66

Officer in co-op 10 2.5 1 1.5

Not an officer in co-op 386 97.5 65 98.5

Total 396 100.0 66 100.0

Missing from total surveys—4

Missing from co-op leadership—1

Table 17: Mother a member or a board member of any community groups or organizations

Total % Co-op %

Surveys of 399 Leaders of 67

Member of community group(s) 234 58.6 44 65.7

Not a member of community group(s) 165 41.4 23 34.3

Total 399 100.0 67 100.0

Missing from total surveys—1

Table 18: Mother an officer of any community groups or organizations

Total % Co-op %

Surveys of 390 Leaders of 65

Officer in community group(s) 159 40.8 30 46.2

Not an officer in community group(s) 231 59.2 35 53.8

Total 390 100.0 65 100.0

Missing from total surveys—10

Missing from co-op leadership—2

Table 19: Father a member or a board member of a co-operative organization

Total % Co-op %

Surveys of 399 Leaders of 67

Member 144 36.1 37 55.2

Not a member 255 63.9 30 44.8

Total 399 100.0 67 100.0

Missing from total surveys—1

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Table 20: Father an officer of a co-operative organization

Total % Co-op %

Surveys of 396 Leaders of 66

Officer in co-op 61 15.4 17 25.8

Not an officer in co-op 335 84.6 49 74.2

Total 396 100.0 66 100.0

Missing from total surveys—4

Missing from co-op leadership—1

Table 21: Father a member or a board member of any community groups or organizations

Total % Co-op %

Surveys of 395 Leaders of 67

Member of community group(s) 227 57.5 48 71.6

Not a member of community group(s) 167 42.3 19 28.4

Other 1 .3 0 0

Total 395 100.0 67 100.0

Missing from total surveys—5

Table 22: Father an officer of any community groups or organizations

Total % Co-op %

Surveys of 392 Leaders of 66

Officer in community groups 169 43.1 38 57.6

Not an officer in community groups 222 56.6 28 42.4

Other 1 .3 0 0

Total 392 100.0 66 100.0

Missing from total surveys—8

Missing from co-op leaders—1

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Table 23: Holds position of leadership, by parental involvement

Co-op boards

Fed./Prov. Municipal Community Service Sports Agricultural CU boards, SWP,

government government groups/boards organizations clubs organizations other co-ops

Percentages indicated

Mother a member of a co-op 20 21 17 26 21 19 25

Mother an officer of a co-op 0 1.5 2 2 2 2 1.5

Father a member of a co-op 40 39 36 46 38 55 55

Father an officer of a co-op 0 16 15 19.5 19 31 25

Mother a member of 80 57 60 65 65 64 66

community groups

Mother an officer of 60 39 42 47 48 55 45

community groups

Father a member of 70 51 57 65 64 71 72

community groups

Father an officer of 40 37 43 53 51 60 57

community groups

n = 10 n = 67 n = 260 n = 92 n = 149 n = 42 n = 67


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Leadership Skills

As illustrated in table 24 (facing page), respondents were asked to indicate the importance

of a variety of skills in assisting them to fulfil their leadership role(s). On the whole, there

was very little difference in the importance ratings indicated by leaders of co-operatives

as compared to total respondents. The use of mean rating scores to identify the three toprated

skills resulted in one small difference. Leaders of co-operatives identified tolerance/

co-operation as most important (4.42), followed by teamwork (4.4) and communication

skills (4.18). The total group identified teamwork as most important (4.52), followed by

tolerance/co-operation (4.51) and communication skills (4.34).

Table 25 (overleaf) shows that there was very little difference in importance ratings

indicated by leaders of co-operatives as compared to total respondents when respondents

were asked to indicate which experiences or training contributed to the development of

the skills they identified as important. A similar pattern appeared when mean rating scores

were used to identify the three top-rated experiences or training. Leaders of co-operatives

identified on-the-job experience/self-taught as most important (4.27), followed by family

community involvement (3.61) and experience with co-operatives and credit unions (3.42).

The total group also identified on-the-job experience/self-taught as most important (4.39),

followed by family community involvement (3.64) and experience with voluntary organizations

(3.44).

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Table 24: Importance of the following skills in assisting leaders to fulfil their role(s) (% shown)

Total surveys n = 400

Co-op leadership n = 67

Very

Unimportant

Very

Important

1 2 3 4 5 Mean Stand.

Dev.

Organizational skills

Total surveys 1.8 1.3 15.0 32.5 49.5 4.27 .88

Co-op leadership 3.0 3.0 19.4 32.8 41.8 4.07 1.00

Networking skills

Total surveys 4.8 8.8 27.4 37.4 21.6 3.62 1.06

Co-op leadership 4.6 12.3 27.7 46.2 9.2 3.43 .98

Public speaking

Total surveys 7.8 13.5 24.8 30.0 24.0 3.49 1.21

Co-op leadership 11.9 16.4 17.9 32.8 20.9 3.34 1.31

Teamwork

Total surveys .5 1.3 8.8 24.8 64.8 4.52 .75

Co-op leadership 0 1.5 10.4 34.3 53.7 4.40 .74

Tolerance/co-operation

Total surveys 0 1.3 8.5 28.5 61.8 4.51 .70

Co-op leadership 0 0 11.9 34.3 53.7 4.42 .70

Delegating skills

Total surveys 2.0 6.8 23.0 37.8 30.5 3.88 .99

Co-op leadership 3.0 14.9 35.8 29.9 16.4 3.42 1.03

Communication skills

Total surveys .8 1.5 11.5 35.3 51.0 4.34 .80

Co-op leadership 0 4.5 17.9 32.8 44.8 4.18 .89

Problem-solving skills

Total surveys .5 3.5 18.3 41.6 36.1 4.09 .85

Co-op leadership 0 7.5 16.4 47.8 28.4 3.97 .87

Inter-organizational or government relations

Total surveys 15.8 15.5 31.5 24.0 13.3 3.03 1.25

Co-op leadership 16.4 14.9 34.3 23.9 10.4 2.97 1.22

Volunteer management

Total surveys 6.5 7.8 26.3 34.3 25.1 3.64 1.13

Co-op leadership 11.9 11.9 29.9 29.9 16.4 3.27 1.23

Financial management skills

Total surveys 6.8 8.5 24.0 31.0 29.8 3.69 1.18

Co-op leadership 4.5 11.9 16.4 37.3 29.9 3.76 1.14

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Table 25: Significance of experience and training in the development of the skills identified as important

(% shown).

Total surveys n = 400

Co-op leadership n = 67

Very

Unimportant

Very

Important

1 2 3 4 5 Mean Stand.

Dev.

On-the-job/self-taught

Total surveys .5 1.0 11.8 32.5 54.3 4.39 .77

Co-op leaders 1.5 1.5 14.9 32.8 49.3 4.27 .88

Job-related training programs

Total surveys 17.5 8.5 20.6 30.8 22.6 3.32 1.38

Co-op leaders 21.2 19.7 18.2 22.7 18.2 2.97 1.42

Volunteer organizations/programs

Total surveys 7.0 10.8 32.2 30.9 19.1 3.44 1.13

Co-op leaders 9.1 9.1 40.9 28.8 12.1 3.26 1.09

Family community involvement

Total surveys 5.5 8.5 28.5 34.0 23.3 3.64 1.21

Co-op leaders 3.0 11.9 26.9 37.3 20.9 3.61 1.04

Informally through others in community

Total surveys 3.3 11.0 39.8 34.3 11.8 3.40 .94

Co-op leaders 3.0 10.4 43.3 31.3 11.9 3.39 .94

Youth programs

Total surveys 25.6 17.6 21.1 21.1 14.3 2.91 2.53

Co-op leaders 34.3 20.9 22.4 13.4 9.0 2.42 1.33

School activities

Total surveys 12.3 15.8 24.0 29.0 19.0 3.27 1.28

Co-op leaders 9.0 19.4 25.4 31.3 14.9 3.24 1.19

Church-related activities

Total surveys 22.1 14.8 20.4 26.4 16.3 3.00 1.40

Co-op leaders 29.9 16.4 16.4 28.4 9.0 2.70 1.39

Agricultural organizations

Total surveys 43.1 13.0 20.1 15.5 8.3 2.33 2.25

Co-op leaders 14.9 10.4 23.9 35.8 14.9 3.25 1.27

Fed./prov./municipal positions

Total surveys 45.2 12.6 21.4 13.6 7.3 2.25 1.34

Co-op leaders 38.5 13.8 21.5 20.0 6.0 2.42 1.35

Co-operatives and credit unions

Total surveys 45.0 14.1 20.4 13.8 6.8 2.23 1.33

Co-op leaders 13.8 10.8 16.9 36.9 21.5 3.42 1.32

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Informal Leadership

Influence of Co-operative Involvement and Education

The following section examines the experiential and educational backgrounds of those

who self-identified as informal leaders. While the actual numbers in each category on

table 26 (next page) are very small, there is a prominent pattern. Informal leaders were

most likely to have been involved with 4-H and co-op schools/co-op youth programs.

Influence of Parental Involvement in Co-operatives and Community

Parental involvement in co-operatives and community organizations was also identified

as a factor in influencing the willingness of children to assume community leadership.

Informal leaders indicated quite high levels of involvement on the part of fathers in cooperatives,

both as members and as executive members, and very high levels of involvement

by both parents as members and as executive members in community organizations

in general.

A more detailed breakdown by type of organization reinforces the importance of

parental involvement in motivating children’s involvement at some stage in their life in

all manner of community leadership (table 27).

U NIVERSITY OF S ASKATCHEWAN • 175


Table 26: Categories of informal leadership, by co-operative involvement

n = 68

Informal Leadership

Co-op–sponsored

child or youth programs Sounding board Volunteer on Raise questions Organize Offer opinions/advice Unofficial secretary

for spouse committees at meetings events to elected officials for an organization Other

Co-op youth seminars 0 2 4 2 3 0 1

Co-op schools 0 1 5 3 4 0 0

4-H 3 10 14 11 11 6 0

Co-op–sponsored

adult programs

Co-op Women’s Guild 0 0 0 0 0 0 0

leadership schools

Co-op Union of Canada’s 0 1 1 1 0 0 0

correspondence courses

Western Co-op College 0 1 1 1 0 0 0

programs

Directors schools 0 0 1 1 0 0 0

Board training through co-op 0 0 2 1 0 0 0

Informal training through 0 2 1 1 1 1 0

board membership

Management training through 0 0 1 0 1 1 0

co-op employment

Sask. Wheat Pool 0 0 0 0 0 0 0

Young Couples Club

Other 1 1 2 1 2 0 0


Table 27: Categories of informal leadership, by parental involvment

n = 68

Informal Leadership

Sounding board Volunteer on Raise questions Organize Offer opinions/advice Unofficial secretary Other

for spouse committees at meetings events to elected officials for an organization

Mother a member of a co-op 3 4 8 6 6 2 0

Mother an officer of a co-op 1 2 3 3 3 1 0

Father a member of a co-op 4 10 14 9 9 4 1

Father an officer of a co-op 3 7 9 6 4 1 1

Mother a member of 5 17 27 18 25 7 1

community groups

Mother an officer of 4 12 19 13 16 4 1

community groups

Father a member of 5 17 27 19 20 6 2

community groups

Father an officer of 4 11 17 12 11 3 2

community groups


• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Diversity

A final aspect of the survey involved examining the demographics of both formal and

informal leaders to identify the amount of diversity found within their membership.

Diversity of membership in organizations has been identified as contributing to the

ability of the organization to act successfully in collaborative initiatives. The level of

representation by gender and race indicates the willingness or ability of organizations

to be inclusive of those who may not typically be involved in a leadership capacity.

Respondents in our survey self-identified by gender only.

Women’s Representation in the Leadership of Co-operatives

Women constituted more than 50 percent of the respondent population, although just

under half (48 percent) self-identified as formal leaders, and well over half (67 percent )

self-identified as informal leaders (table 3). Within the portion of those who indicated

holding formal leadership in co-operatives, however, women’s representation was much

lower (table 7). Because respondents indicated leadership in more than one type of cooperative,

the totals are greater than the actual number of people identifying as current

or past leaders of co-operatives (n = 67), thereby making calculations of percentages impossible.

However, if we look generally at the numbers of people indicating leadership in cooperatives,

men self-identified as holding current or past positions of leadership 62 times,

whereas women self-identified as holding current or past positions of leadership 18 times.

This pattern is not unlike that found in the historic data.

Respondents were asked to indicate the level of formal leadership by parents, both in

co-operatives and community organizations in general. Twenty-five percent of those who

formerly held or currently hold positions of formal leadership in co-operatives indicated

that their mother had been a member or board member of a co-operative (table 15), but

only 1.5 percent responded that their mother had been an officer in a co-operative or

credit union (table 16). The percentages were similar in the total respondent population—

17 percent of those who formerly held or currently hold positions of formal leadership

in organizations of all kinds indicated that their mother had been a member or board

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member of a co-operative (table 15), and 2.5 percent responded that their mother had

been an officer in a co-operative or credit union (table 16).

In contrast, women’s participation in leadership positions in community organizations

in general was markedly different: 66 percent of those who formerly held or currently

hold positions of formal leadership in co-operatives indicated that their mother

had been a member or board member of a community organization (table 17), and of that

same group, 46 percent responded that their mother had been an officer in a co-operative

or credit union (table 18). The percentages were similar in the total respondent population—59

percent of those who formerly held or currently hold positions of formal leadership

in organizations of all kinds indicated that their mother had been a member or board

member of a community organization (table 17), and 41 percent responded that their

mother had been an officer in a community group or organization (table 18).

Summary

ormal leaders were more likely to be male, aged 36–45, well educated, earning a middle

range of income, living on a farm or in a community of less than 5,000 population. They

were most frequently farmer/ranchers, retired, or in clerical, teaching, or management

positions. Within the group self-identifying as formal leaders in co-operatives, the same

demographic patterns were found, with one exception: leaders were found in two age

groupings—either 36–55 or over 65.

Informal leaders were more likely to be female, aged 25–45, well educated, earning a

middle range of income. They were most frequently employed in clerical or management

positions, or as homemakers, the majority residing in communities with populations

larger than 10,000.

Within the respondent population, the majority of leadership activity was in community

groups and boards (78.5 percent), followed at some distance by service organizations

(28 percent). Twenty percent of respondents held elected positions in municipal government

and co-operative organizations.

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

Respondents in both the total population and within the co-operative subgroup indicated

that involvement in church groups was the most frequent experience of youth, but

more co-op leaders were likely to have been involved with 4-H and specific co-operative

youth programs. Leaders in non–co-operatives rated their youth experiences as somewhat

more important in terms of leadership development.

Formal leaders of co-operatives indicated the highest level of attendance at cooperative-sponsored

training programs as an adult, and ranked these programs as having

greater importance in their development as a leader as compared to the general sample of

respondents. The influence of this training was also indicated by a quarter of those selfidentifying

as leaders in municipal government and agricultural organizations. Despite the

fact that most respondents had not been involved in co-operative-sponsored programs,

49 percent of those responding to this question indicated that co-op programs had led to

greater leadership involvement in community organizations, just slightly lower than the

ranking indicated by co-op leaders. Within both groups, co-operatives were perceived as

providing moderate to a great deal of support for leadership development in communities.

Parental involvement in co-operatives and community organizations was a definite

factor in influencing the willingness of children to assume community leadership. Significantly,

more co-op leaders than the general population indicated that their mother was

a member of a co-operative, a member of community groups in general, and on the executive

of community groups. A similar pattern was discovered with the involvement of

fathers of current or past co-operative leaders, where a significantly higher level of involvement

was indicated among those whose fathers had been active in both co-operatives and

community groups.

Women constituted more than 50 percent of the respondent population, although just

under half (48 percent) self-identified as formal leaders, and well over half (67 percent)

self-identified as informal leaders. Among the respondents who indicated holding formal

leadership in co-operatives, however, women’s representation was much lower.

The pattern found in the historic data was similar. Twenty-five percent of those who

formerly held or currently hold positions of formal leadership in co-operatives indicated

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that their mother had been a member or board member of a co-operative, but only 1.5

percent responded that their mother had been an officer in a co-operative or credit union.

The percentages were similar in the total respondent population—17 percent of those

who formerly held or currently hold positions of formal leadership in organizations of all

kinds indicated that their mother had been a member or board member of a co-operative,

and 2.5 percent responded that their mother had been an officer in a co-operative or credit

union.

In contrast, women’s participation in leadership positions in community organizations

in general was markedly different: 66 percent of those who formerly held or currently

hold positions of formal leadership in co-operatives indicated that their mother

had been a member or board member of a community organization. Of that same group,

46 percent responded that their mother had been an officer in a co-operative or credit

union. The percentages were similar in the total respondent population.

Conclusions

Co-operatives make a significant contribution to the development of leadership in the

province of Saskatchewan, providing role models for future leaders through the involvement

of parents in leading co-operatives and credit unions, as well as other community

organizations. Through the support of education and training initiatives, co-operatives

increase their involvement in building the capacity of their members to take on leadership

roles in the community. In addition, co-operatives are participatory democratic organizations,

and involvement on co-operative boards helps to prepare individuals for more

general community leadership.

As concluded in the community case studies, the ability to successfully engage in

collaborate initiatives will become increasingly important to co-operatives and credit

unions. To accomplish this, leaders need a vision of what collaboration can accomplish,

sensitivity, and the ability to develop relationships with diverse stakeholders. Diversity in

opinion and experience contributes to this ability.

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• S OCIAL AND E CONOMIC I MPORTANCE OF C O - OPERATIVES

As indicated in the literature review (appendix B), however, this has not always been

achieved. It has been found, for example, that women, youth, and disadvantaged groups

are under-represented in leadership positions, particularly in formal organizations. A 1994

profile of leadership in rural Manitoba shows that women are under-represented in community

leadership, particularly as elected officials in formal organizations. 1

Co-operatives can include a diversity of people and opinions from the community on

their boards, which will help to strengthen and multiply the synergies among people and

increase the numbers of those available for leadership. Unfortunately, women are underrepresented

in leadership positions generally, and in the co-operatives and credit unions

of this study.

Clearly, women have the ability and desire to lead, as demonstrated by their representation

in positions of leadership in general community associations and boards. A similar

conclusion was reached by a 1996 study, Women in Agriculture, conducted by the Agriculture

and Rural Restructuring Group of the Rural Development Institute in Brandon.

They recommended that agricultural organizations wishing to gain new perspectives and

new members could achieve their purposes by simply taking advantage of the contributions

of farm women already active in community groups. 2 Co-operatives and credit

unions would do well to follow that suggestion.

Endnotes

1. D. Ripley and R. Rounds, Profiles of Individuals in Leadership Positions with Rural Manitoba

Organizations (Brandon: Rural Development Institute, 1994).

2. More extensive recommendations for action around increasing women’s participation in co-operatives is

also to be found in L. Theis and L. Hammond Ketilson, Research for Action: Women and Co-operatives

(Saskatoon: Centre for the Study of Co-operatives, 1994).

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A PPENDIX A

Functional Groupings

of Communities

To examine in more detail the relationship between co-operative activity and

the communities in which co-operatives are located, the study made use of a

categorization of communities developed by Stabler and Olfert. 1 This system placed

communities in one of six groupings, each of which corresponded to a different level of

a functional hierarchy.

Stabler and Olfert described the groupings as: Minimum Convenience; Full Convenience;

Partial Shopping; Complete Shopping; Secondary Wholesale-Retail; and

Primary Wholesale-Retail. Communities below the Primary and Secondary Wholesale-

Retail levels were assigned to one of four functional categories using a cluster analysis

program, which grouped together communities that were similar in terms of population,

commercial functions (as represented by 30 Standard Industrial Classification (SIC)

codes), and the number of doctors, hospitals, special health care facilities, high schools,

and grain elevators.

Stabler and Olfert report the results of the cluster analysis for 1961, 1981, 1990, and

1995. Table A.1 presents the number of communities in each of the categories, as well

as the average population in each category, for the 1995 analysis. As the relatively large

standard deviation indicates, there is wide variability in the population within each

category. This suggests that population is not always a valid indicator of the services

U NIVERSITY OF S ASKATCHEWAN • 183


• A PPENDIX A

and functions performed by a community. Since it is this latter aspect that is thought to

be important with respect to co-operative activity, this study used the functional groupings

rather than the population groupings.

Table A.1: Functional classification of Saskatchewan communities, 1995

Functional Number of Average Standard

Category Communities Population Deviation

Minimum Convenience Centre 500 180 197

Full Convenience Centre 59 861 373

Partial Shopping Centre 22 2,050 723

Complete Shopping Centre 7 4,809 831

Secondary Wholesale-Retail 8 17,610 10,257

Primary Wholesale-Retail 2 184,236 7,792

Source: Stabler and Olfert.

Reference

1. See Jack C. Stabler and M. Rose Olfert, The Changing Role of Rural Communities in an Urbanizing

World: Saskatchewan—An Update to 1995 (Regina: Canadian Plains Research Centre, 1996).

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A PPENDIX B

A Review of Concepts

and Literature

Introduction

Throughout the twentieth century, co-operatives have played an integral role in the

social and economic development of Saskatchewan. The formation of the first cooperative

enterprises at the turn of the century grew out of the struggle of rural people to

gain control over their local economies. They turned to co-operatives as a means of marketing

their agricultural products and obtaining needed goods and services. A statement

made in 1941 still applies today:

Saskatchewan provides to the rest of Canada stimulation and encouragement for

co-operative action. It is probable that in no province or state on this continent

with a population of approximately one million has the Movement made so much

and such varied progress as in that prairie province. 1

Co-operatives have been strongly associated with combined social and economic

development initiatives in the province. There is a long-standing relationship between

co-operatives and community economic development (CED). Not surprisingly, the CED

literature provides valuable insights into the topic under examination. According to a 1989

report by the US Agricultural Cooperative Service to the United States Congress, cooperatives

have been formed to meet at least two different circumstances—either to

U NIVERSITY OF S ASKATCHEWAN • 185


• A PPENDIX B

correct a power imbalance, which has barred some individuals from participating on an

equal footing in the marketplace, and/or to meet social and economic needs of those

individuals who, acting alone, could not provide them. 2 Thus, it could be said that cooperatives

have often been formed in response to community economic development

agendas in rural communities. Regarding the present and future role of co-operatives,

researchers 3 have advanced the thesis that “co-operatives correspond to a substantial

degree to the characteristics of organizations needed for sustainable community development

and that co-ops have a strong (though uneven) record of contributions to CED in

Canada.” 4 Further, Hammond Ketilson et al. have suggested in Climate for Co-operative

Community Development that “co-operatives are fundamentally a form of community development.”

5 In order for a co-operative to be formed and sustained within a community,

there must be a willingness on the part of the local people to be involved, to take initiative,

and to identify with the co-operative. In addition, as with community development

in general, the members of the co-operative must consider all the stakeholders in the

community when engaged in planning for the organization. 6 In order for large numbers

of co-operatives to be formed, there must also be strong support from the wider social

movement and from established co-operatives. This is true for all the strongest groupings

of co-operatives in Canada today—from the caisses populaires in Québec, to the credit

unions and small-town co-operatives in the Atlantic provinces and western Canada, and

the agricultural co-ops across the country. 7

A framework for considering the impacts of co-operatives on communities, developed

through past research at the Centre for the Study of Co-operatives, has been used to structure

the literature review for the present study. Unless otherwise noted, material used to

explain the components has been taken from the sources indicated in endnote eight (page

206). 8 The seven different components of the conceptual model are:

• providing competitive goods and services;

• providing goods and services that would otherwise not be provided;

the social role of co-operatives and social capital (called community

cohesiveness in the 1991 study);

• community interest versus self-interest;

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• additional economic activity created by the co-operative;

the impact of management on co-operative behaviour; and

• local control over decision making.

In addition, the present study also examined relevant literature regarding the concept

of social capital and the development of community leadership. To augment the work

already done in the 1991 study, examples from outside the province of Saskatchewan have

been chosen, where possible, to illustrate these different elements.

Of necessity, the literature review has been separated into different sections. A concern

should be noted, however, regarding this type of structure. According to Tom Webb,

from Co-op Atlantic, the separation of the social and economic impacts of co-operatives

is a dangerous way to view the world. The general tendency in our society to compartmentalize

the different activities in our lives has resulted in a divorce of the social from

the economic. Furthermore, the drive of the capitalist-based economic system to return

maximum profit means that social activities are often seen as impediments to economic

activities. This gives a distorted view of the realities of life. It is vital to keep in mind that

a complex relationship exists between social and economic roles, and that these roles will

affect each other within both the co-operative and the larger community. 9

Economic Components

Competitive Goods and Services

One of the traditional roles for co-operatives is to provide products and services at competitive

prices, which becomes increasingly important as the number of businesses providing

a service in a community declines. As this occurs, the ability of the remaining firms

to charge higher prices increases, and price increases that occur in this manner may go

unchallenged if the demand in the region is sufficient to allow only one firm to operate.

Co-operatives, on the other hand, can make different kinds of economic decisions

because of the structure of their organizations. Rather than aiming for the highest possible

profits, the co-operative can make decisions that will maximize the well-being of the local

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• A PPENDIX B

community. Members may be willing to see their co-operative operate on a break-even

basis, providing it allows the price they pay for the good or service to be lowered. This

concern for the well-being of the membership of the co-operative and the surrounding

community taking precedence over profitability is clearly illustrated in the Evangeline

region of Prince Edward Island. 10 A case history analysis of the region notes, for example,

that the main reason Chez Nous, a community service co-operative responsible for a care

home for the elderly, was not developed as a worker co-op was because those involved

wanted to ensure the full support of the entire community. They also wanted the price

kept low enough so that all the seniors in the community could afford to live there should

they choose to do so.

Figure 1 illustrates this role of providing competitive goods and services. The demand

for the good or service in the community is given by D, while the average cost and marginal

cost curves for the firm are given by AC and MC respectively. These cost curves represent

a firm with a fixed investment cost and relatively constant variable cost. In the

absence of other competitors, the firm will be able to act as a monopolist, charge a price

p m (determined by setting marginal revenue (MR) equal to MC), and earn a profit equal to

the outlined rectangle.

Price

p m

p

p c

a

b

MR

q q m Q

q c

D

Output

Figure 1: Market power and the role of co-operatives

AC

MC

Although profits are being

earned by the firm, it is not

profitable for another firm to

enter the community to supply

the good. For instance,

suppose that the two firms are

able to divide the market between

themselves equally. As

long as the MR curve lies below

the AC curve, the two

firms will be unable to earn

positive profits. As an example,

assume that the total

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quantity produced by the two firms was equal to Q; the price charged would then be p.

With a 50 percent market share, the quantity each would sell would be equal to q. Since

the MR curve is also the demand curve for a firm with a 50 percent market share, as long

as MR is less than AC, both firms will lose money.

The problem in this situation is that the market is not large enough to support more

than one firm, and with only one firm, there is an increased possibility of market power

being wielded. As would be expected, this type of situation is more likely to occur as the

number of people in a community falls. Wielding market power in a community has an

impact on the people purchasing the good or service. In the absence of competition, there

will be little incentive for a profit-oriented firm to lower prices, since doing so would result

in smaller profits. Co-operatives, however, are able to consider the impact of high

prices on their members when they make their pricing decisions.

Using figure 1 as an example, a co-operative might decide to price the good or service

at p c , resulting in a demand for the good of q c . At a price of p c , the co-operative would

just be breaking even, while consumer members would be experiencing a benefit equal to

the grey-shaded area. (In formal economic terms, the member gain is the change in consumer

surplus, area p m abp c .) In fact, the gain experienced by members is greater than the

loss in profits. Thus, members are willing to see the co-operative operate on a break-even

basis, as long as it allows the price they pay for the good or service to be lowered. 11

Provision of Goods and Services Not Otherwise Provided

A co-operative also has a role to play in providing goods and services that would otherwise

not be provided were the co-operative not present. This is vital for smaller or isolated

communities, where this situation is all-too-frequently the case, as in many of the rural

communities in Saskatchewan. Through the commitment and support of the co-op

members, the broader community is bolstered both economically and socially.

Examples of the importance of the co-operative’s role in this regard can obviously

be found outside of Saskatchewan as well. David Vail notes that part of the “All Sweden

Shall Live!” campaign has been to save the local country stores so that those unable to

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• A PPENDIX B

travel will still have access to necessary supplies. As a result of the campaign, some remote

Swedish villages have joined together in a purchasing co-operative in order to maintain

their village stores. 12 Bengt Lorendahl has also written about the resurgence of Swedish

co-operatives in the last ten years. 13 According to Lorendahl, the desire of people in more

sparsely populated areas to stay in their communities has led to the development of cooperatives

to provide goods and services, as well as employment. 14 Another example comes

from the west country of Ireland, known as the Gaeltacht (Irish speaking) districts. 15

According to an essay written in 1981, twenty-two co-operatives emerged in the region

to respond to local needs. 16 Examples include summer colleges for Irish language, printing

and publishing of Irish language texts, group water schemes, and small industry. A final

example is provided by the Evangeline district of PEI, where there was a strong feeling

that the Acadian culture needed to be protected and preserved. One way to fulfil this

need was by forming the Community Communications Co-operative, through which

the French language and culture could be broadcast into the homes of the communities. 17

Clearly, it is the character of the co-operative organization, based in a democratic local

membership, that allows for this type of action. 18

The economic argument for providing goods and services that would otherwise not

be available is an extension of the argument made in the section on competitive goods and

services, above, with respect to market power. Following the earlier example, suppose that

the demand for a locally supplied good or service has fallen to the point where it is no

longer possible for a profit-oriented firm to stay in business. This would occur, for instance,

if the rate of return on the investment fell sufficiently to no longer be competitive

with other investment opportunities. In this situation, pressure would exist for the firm

to leave the area. While this might not happen immediately (often a firm is trapped in a

community because no sale exists for its assets), when it eventually does, there will be

little chance of someone else stepping in to provide the service. Although there may be

little profit to be derived in providing the particular good or service, it may nevertheless

be economically advantageous for consumers to have the good supplied. This will be the

case if it is costly (in terms of time and money) for them to travel to other communities

in order to purchase the good or service.

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Price

Price

P L

P L

'

P c

}

t'

}

t

S

AC

MC

D L

'

D L

Output (y)

D C

D C

'

Output (y)

Local Community

Central

Figure 2: Co-operative provision of goods and services that would otherwise not be provided

Figure 2 illustrates this situation graphically. The left-hand side of the figure shows

the demand at the local community level. Due to shifting population (fewer people in

the community) and reduced transportation costs (t to t’), demand at the community

level shifts in from D L to D’ L . At the same time, demand at the more central location

shifts out from D c to D’ c .

The effect of reduced transportation costs in this example is particularly interesting.

With a reduction from t to t’, the price at the local level falls to P’ L . While this makes the

goods cheaper at the local level (the local price (P L ) is equal to the central price (P c ) plus

transportation costs), it also makes goods purchased at central locations less expensive,

thus making it cheaper for people in the community to shop elsewhere.

Even with reduced transportation costs, demand at the local level will not completely

disappear. This is partly a result of the fact that some people in the community are not

mobile (e.g., the elderly) and also because people like the convenience of having certain

goods and services nearby (e.g., basic groceries, minor repairs, and parts). If the cost structure

of the firm supplying the good or service is given by average and marginal cost curves

AC and MC, then a shift in demand to D’ L will mean that the good will no longer be supplied

locally. This follows because D’ L lies below AC at every point, implying that there is

no quantity for which consumers are willing to pay a price that is above the costs of pro-

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• A PPENDIX B

viding the good. For instance, at price P ’ L , the loss to the firm supplying the good is

given by the outlined rectangular area. It should be noted that this loss might not be negative

profits, but simply a rate of return that is less than a competitive rate elsewhere in

the economy. 19 As a result of losing the local business, people who do purchase locally

are made worse off, which can be measured by the grey-shaded area in figure 2.

The loss to consumers from the closure of the business is greater than the loss that

would be incurred were the business to continue to operate. This suggests that it would

be economical for the good to be supplied, as the benefits of having it supplied are greater

than the costs of supplying it. As long as ownership of the firm is separated from the

people who consume the good or service, however, it will never be advantageous for the

good to be supplied.

The problem can be solved by having the costs and benefits incurred by the same

group of people, as is the case with a co-operative or a community-run firm. If a cooperative

were to operate this business, for instance, its members would encourage it to

stay in business, even though it is not earning a competitive rate of return. As can be seen,

the behaviour of the co-operative would be quite different from that of a profit-oriented

firm.

Social Infrastructure and Social Capital

Before beginning on the specific task of examining the social role of co-operatives in the

community, it is important to discuss in general terms what is meant by community social

infrastructure and community social capital. 20 This is critical not only because of the

social role of co-operatives, but also because of how these two elements affect the other

components of the co-operative impact in the community. In recent years, researchers

interested in sustainable rural and community development have begun to look beyond

mainstream economic thought. As economist David Vail states, “It seems to me vacuous

to speculate about some future generation’s well-being, defined as the sum of individual

utilities, while ignoring the cultural meanings, values, and norms, and the social relation-

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ships that shape individuals’ lives.” 21 Much of the concern in the community development

literature centres around the breakdown and decay of communities and the isolation of

the individual in society. 22

One response to these concerns over community breakdown has been to take a closer

look at what many researchers refer to as social capital. Cornelia and Jan Flora include social

capital as one of the three components critical for the development and maintenance

of dynamic and vibrant communities. The first two, which are relatively well known, are:

1) the physical infrastructure—the development of railroads, telecommunications, roads,

postal services, etc.; and 2) the personal infrastructure—the development of individual

leadership within the community. 23 The importance of leadership development is discussed

more fully elsewhere in this report. The third necessary component—the social

infrastructure—has been given less attention by researchers and CED workers. 24 It is,

nevertheless, the key ingredient that ties together the physical and the human, allowing

the community to grow and develop.

James S. Coleman defines the concept of social capital through its function. 25 Unlike

other forms of capital, it is not a single entity but a variety with elements in common.

Furthermore, “social capital inheres in the structure of relations between actors and among

actors. It is not lodged either in the actors themselves or in the physical implements of

production.” 26 Social capital is brought about, therefore, through networks, social norms,

and social trust. Indeed, contrary to popular thought regarding competition in the marketplace,

community members will develop social capital only through co-operation and

mutual aid. 27 The acquisition of information is a powerful example of the importance of

social capital. Through positive social relations, often maintained for other purposes, information

can be obtained that is useful for business, politics, and/or social obligations. 28

An important aspect of the formation of social capital, often to its detriment, is that

social actions and efforts may not necessarily directly benefit the individual who undertakes

them and consequently may not be performed. If this is the case, social capital will

not build in the community. For example, if A asks and receives a favour, and contracts

an obligation from B, he does so for the needed benefit. There will be little thought given

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• A PPENDIX B

to the fact that the linkage with the other person will add to the social capital fund, which

will be tapped at some future date by B. Thus, if A goes outside the community for assistance,

or acts alone and does not seek assistance, then social capital will not grow in the

community. 29 This aspect of the accumulation of social capital will be expanded upon in

the section below dealing with self-interest versus community interest.

According to Flora and Flora, there are three major aspects to the formation of an

entrepreneurial social infrastructure, or positive social capital development—symbolic

diversity, resource mobilization, and quality of linkages. 30 Symbolic diversity exists in

communities that value diversity of opinion, accept controversy, and allow for the discussion

of alternative solutions; in addition, politics are depersonalized and community

leaders focus on the quality of the process rather than on winning. Symbolic diversity also

implies permeable community boundaries. 31 There is a tendency to include rather than to

exclude people at the margin. Two serious blockages to symbolic diversity are often found

in rural areas. The first is the high density of acquaintanceship, which leads to the second

—role homogeneity. 32 These blockages often lead to the suppression of controversy, thus

allowing problems to fester and grow within a community. What is key here for healthy

development is the ability of a community to be inclusive rather than exclusive.

It is also critical that the community be able to collectively mobilize all available resources

for investment within the community. Ways must be found to allow community

members to invest in some form of group enterprise, rather than concentrating on private,

individual investment. If a large number of people are able to invest, and are publicly

acknowledged for investing resources such as time and knowledge, along with financial

resources, then the community’s social capital fund will be augmented. In one northern

US community studied, for example, resource mobilization was judged to be relatively

low. Not only was collective investment in the community infrastructure low, but some

groups, such as young people and the elderly, were seen solely as resource users rather

than as potential community resources. 33 Flora and Flora have also found that there is

little entrepreneurial activity, either by individuals or by the larger community, in areas

where the resources available for investment are concentrated with only a few individuals. 34

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The final element necessary for the development of positive social capital is the formation

of high quality formal and informal networks. 35 These networks need to be diverse,

i.e., spread throughout the community. Multiplicity of networks will not only make community

members aware of the different problems to be dealt with, but will also encourage

more innovative solutions. This will also help the development of diversity in community

leadership. Linkages also need to be developed, both horizontally and vertically, outside

the community. Through horizontal networks, communities can glean development ideas

from other communities and groups like themselves. The response to knowledge gained

through these types of efforts is often, “If they can do it there, then we can do it here.”

Vertical networks, which link community members with public and private resources

beyond the community, provide needed information, technical assistance, and financial

resources. 36 These linkages can be built through formal organizations or informal

relations.

According to Jack Stabler and Rose Olfert, consolidation of the trade centres in Saskatchewan

will continue. 37 By 1995, there were only thirty-nine communities remaining in

the top four functional categories identified in their research, a loss since 1961 of ninetynine

communities, all from the third and fourth categories. 38 The pressure on individual

communities, and on rural communities as a whole, makes the development and deployment

of social capital more critical. Social capital is a strategic resource, and adds greatly

to the value of investments in physical and personal/human capital.

The Social Role of Co-operatives

Co-operatives and credit unions can play important roles in the development of social

infrastructure within a community. At the same time, it is evident that the character of a

community can be key to the success of the co-operative. There is a positive feedback, or

interdependence, between the co-operative and the community’s sense of identity. Comments

made during key informant interviews during the 1991 study (Fulton et al.) indicate

that community is valued and that co-operatives play a role in maintaining that sense

of community. Comments also indicate that community is not something tangible to

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• A PPENDIX B

which one can point and say, “That is community.” It is viewed rather as part of everyday

life, of people interacting with each other as they go about their regular business. Furthermore,

the co-operative is viewed differently from a 7-Eleven, for example, which indicates

that something collectively and locally owned and controlled takes on an added, or a

different, value.

Size of community seems to have an influence on the perceived social role of co-operatives

and the contribution they make to community cohesiveness. In the smallest of the

communities examined, there had been a long history of co-operative community activity.

The co-operative store was more than just a point of business; it was often the social and

economic hub of the community. Residents went there to pick up their mail, have coffee,

catch up on community news, or plan events.

In the larger communities, even if the co-operatives had a broad base of support,

the majority of their activities were found to be of the good corporate citizen nature. They

supported local clubs and events financially, and also participated in parades and other

community activities. Involvement in the community as an organization consisted, for

example, of donations to local clubs, provision of scholarships and bursaries, and purchase

of 4-H calves. A number of comments from the 1991 study, however, indicated that many

of these co-operative organizations were somewhat more community-oriented, beyond

being good corporate citizens.

The relationship with branch organizations meant that financial contributions and

support were made to all communities, not only the central one, where the co-operative

was based. Involvement by staff in community events was also noted as an important contribution

to the viability of some communities. As one manager interviewed for the 1991

study said, “We want to employ staff who are prepared to participate in the community.

The board emphasizes community involvement and will pay for staff memberships in

local clubs.” In other communities, those interviewed talked proudly of their volunteer

commitments. Among the board members in particular, it seemed to be an indication of

a good manager if he or she were actively involved in community activities. 39

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Community versus Self-Interest

There is an additional element that should be considered in the question of local versus

central provision of goods and services. Suppose that due to demand shifting from the

local to the central level, a local business faces the prospect of having to raise prices in

order to cover costs. This could be the case if, as a result of falling demand, the firm is

unable to achieve the level of economies of scale it once did. This increase in price, however,

is likely to lead to more people by-passing the local area to shop at a central location,

which in turn will lead to higher prices yet again.

The problem has many of the elements of a Prisoner’s Dilemma. Individuals in a

community decide to shop at the central location because it is beneficial for them to do

so. When a large number of people do this, however, the result is higher costs for the firm

and higher prices for consumers. Over time, such behaviour may even lead to the local

firm closing down. Thus, in attempting to increase their individual welfare, the residents

have actually reduced the overall welfare of their community.

Co-operatives and community-owned businesses offer a possible solution to this

problem. Through collective ownership of a business, community or co-operative members

may be more likely to see the effect of by-passing their local store or business, and

hence be more likely to alter their behaviour. As a result of residents changing their buying

habits, a locally owned business might actually be able to prosper. This will happen

if the increased sales are sufficient to lower costs and achieve economies of scale.

The above arguments are also applicable in the case of social activities and services

that might be provided in a community. Although such services are distinct from the

business activity in a community, there is nevertheless a correlation. The loss of a grocery

or hardware store, for example, may remove the only natural place for people in the community

to meet, discuss local issues, and receive support and encouragement. The formation

of a co-operative or community-owned business may be one way of getting people to

realize that their business decisions and social activities are related. Building community

spirit and being aware of the linkages between social and economic activities are vital to

the well being of the community.

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Additional Economic Activity

Co-operatives and community-oriented enterprises can also play a role in attracting and

retaining additional economic activity in a local area. The argument here is similar to that

made above with respect to the provision of a good or service that would otherwise not be

provided. In the case of additional economic activity, however, the focus is not so much

on what members of the community receive as consumers, but rather on the benefits that

flow to the community as a result of having additional employment and its corresponding

spin-offs.

It is useful at this point to once again distinguish between the behaviour of a profitoriented

firm, on the one hand, and a co-operative or community-based firm, on the

other. For a profit-oriented firm, any new business venture would have to be profitable

enough to earn as good a rate of return as could be earned elsewhere in the economy.

For a community-oriented firm, profitability would not be the only consideration. Such

firms would also be interested in the effect of the new venture on employment, as well as

in the resulting spin-off effect of that employment on the health of other firms in the

community. If these other benefits were large enough to offset any loss in profits, then

the new venture would be economical and should be pursued. An excellent example of

this is the local credit union support for Women and Rural Economic Development

(WRED), a CED organization in Ontario that focusses on local grassroots development,

networking, and information exchange. 40 According to statistics gathered in April 1996,

the Rural Enterprise Loan Fund, a micro lending program with loans deposited and

administered by the credit union involved, had generated $2.4 million in gross revenue

and helped 230 women start their own businesses. 41

Co-operatives would obviously want to encourage a business that provided employment

and economic activity in the community. This is particularly true for worker cooperatives,

in which case the benefits would not be limited to the profitability of the

enterprise. The workers would also be interested in the possibility of employment opportunities

that would otherwise not exist, for example, in a community where other jobs are

unlikely to be forthcoming.

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Members of other types of co-operatives might also have an interest in seeing additional

economic activity undertaken in the community. Unless the benefits of this activity

are spread rather generally across the membership of the co-operative, however, it may be

difficult to persuade the majority to support the proposed enterprise. Co-operatives are

thus likely to be rather selective about the types of activities they will support.

The Impact of Management on Co-operative Behaviour

The impact of management on the market behaviour and operation of a co-operative will

also determine the role that co-operatives play in a community. One study of consumer

co-operative managers conducted on the east coast of the United States in the 1970s examined

the reasons for success and failure of co-operative organizations. 42 The researcher was

interested in identifying the reasons for the conservative behaviour of a group of co-operatives

that were either stable or in decline—a group he designated the frozen co-operatives.

The researcher identified a belief that business success and social (or co-operative)

values were incompatible. This belief led to two world views, resulting in two types of

leaders/managers. The first was the trader, who believed that economic criteria alone

should drive decision making. This individual saw adherence to co-operative principles

as a burden and a barrier to business success. The other type of leader was the idealist,

who was prepared to compromise economic criteria in order to adhere strictly to cooperative

principles. Neither approach resulted in rapid improvements in sales or profitability.

What did work, however, were business strategies focussed on translating social

values into business operations, which resulted in both improved business performance

and increased member benefit by providing distinctive services to the customer/member.

There was no need for business efficiency to be in opposition to socially responsible

behaviour. The key thing was to identify the social values of the stakeholders (member/

customers) and to demonstrate them through the actions of the co-operative.

A more recent study of Saskatchewan’s Co-operative Retailing System indicated

that the board of directors in smaller co-operatives had a significant impact on the daily

operations of the retail. 43 Since co-operative management in small and medium-sized

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communities will be heavily influenced by the interests of the board—these being individuals

living in those communities and having a strong vested interest in their viability—

it is expected that co-operatives will be engaged in activities with a strong community

orientation, both economic and social.

Local Control over Decision Making

Merger and growth are extremely contentious issues. From the members’ perspective,

growth of the organization is often viewed as negative because it dilutes member control.

At the same time, it also allows economies of scale to be achieved, resulting in lower costs.

Merger with a central organization results in a shift of decision making from the local

level to the central organization. Conflicts may arise between management at the local and

central levels, as well as within the membership. An associated cost from the perspective of

the membership is the increased probability that management will dominate in decision

making. 44 Local autonomy is seen as one of the central features of many co-operative systems,

although this has been modified somewhat in some of the co-operative structures in

Saskatchewan.

Some researchers suggest that within the agricultural sector, a centralized organization

“capable of directing and, on occasion, coercing their members” may be necessary. 45 The

major agricultural co-operative in Saskatchewan, which has been very successful, has

adopted a modified version of this type of structure. The relationship between organizational

structure and market performance has also been found to be significant under certain

conditions. In such situations, loss of local autonomy may become an accepted fact.

LeVay argues that while an organization may retain its co-operative form, it loses its

co-operative character, 46 but suggests, however, that this is necessary for organizational survival.

The centralized structure enables senior decision makers to have a large measure of

control over local or branch co-operatives. And although there are mechanisms established

to allow for the participation of local members in decision making, they are based primarily

on a representative, rather than a participatory, model.

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The credit union system, although modeled on a federated structure, possesses characteristics

of a unitary context for inclusive decision making. 47 The legitimacy for control

over the actions of the autonomous credit unions at the local level rests in legislation

enacted in the province. In accordance with the Saskatchewan legislation, a credit union

is required to meet the “standards of sound business practice” prescribed by the Credit

Union Deposit Guarantee Corporation. 48 If it fails to meet these standards and does not

respond to suggestions by the corporation as to how it might, it is subject to being placed

under supervision until such time as its business status improves or it successfully merges

with another credit union.

Consumer co-operatives differ from both the agricultural and financial co-operatives.

The pattern has traditionally involved retail co-operatives organizing independently at

the local level and subsequently pooling resources in order to purchase a wholesaler. The

retails own the wholesaler and formally control its decision making through their representatives

on the board of directors.

Despite the efficiencies to be gained, there has been a particular reluctance in this

sector to merge into a centralized body. This is due to a feared threat to the local autonomy

of the members in the federated organization. If there is a sharing of goals between

units, however, it is possible to have high levels of interdependence without conflict in

the federated context. Conflict may arise, however, if authority over decision making as

it affects the unit does not remain at the unit level. 49

Countervailing power is created by the values underlying the principles of the cooperative

organizations. 50 This power enables the retailers to maintain control over their

organizational decision making, while at the same time having input into the decisions

of the wholesaler. Countervailing power also contributes to the level of satisfaction with

the retailer/wholesaler relationship, adding to a sense of unity among retail members, and

fostering stability within the system. Because of the nature of co-operative organizations

and the desire to maintain co-operation among co-operatives, the retail has a strong motivational

investment in goals mediated by the co-operative wholesaler. And despite disagreements

that may exist with the wholesaler, there is a commitment to developing a

strong retailing system.

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• A PPENDIX B

Co-operatives and Community Leadership

As noted above, strong leadership is one of the vital components for CED in rural communities.

51 This section raises the following questions on the subject:

• What leadership is available in rural communities?

• What kind of leadership is necessary for CED in rural communities?

• What impact can co-operatives have on the development of that leadership?

According to Ronald Hustedde, rural communities must contend with three major

issues when trying to build up their leadership base. 52 First, there is the smaller population

base out of which the community can draw its leadership. One of the leading causes of

this problem is the loss of leadership due to out-migration. 53 This has been a significant

component of the restructuring of rural Saskatchewan that has taken place during the

last forty years. By 1971, Saskatchewan’s once-strong rural population had become a minority.

54 Compounding this problem is the numbers of people in the labour-force age

group (approximately twenty to sixty-four years) who have left smaller centres for urban

communities. 55 Thus, rural communities may not have the critical mass of leadership

potential necessary for collective action within their communities.

Second, the rural community must often rely on volunteers to provide leadership (and

followers) for community projects, since they frequently do not have the resources to hire

staff and specialists. As a result, people must often learn the required skills on the job. 56

According to Statistics Canada data, the highest volunteer rates are found in rural and

small urban areas with populations of less than fifteen thousand. 57

Finally, rural communities frequently lack the information resources useful for community

projects. Due to isolation and a reliance on more traditional sources of information,

communities may not even be aware of what resources exist. 58 In addition, education

levels, an indicator of the capacity to participate in the “knowledge-intensive” sector, are

lower in the rural areas of Canada. 59

These problems faced by rural communities are further compounded by other issues

surrounding leadership roles. It has been found, for example, that women, youth, and

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disadvantaged groups are under-represented in leadership positions, particularly in formal

organizations. 60 According to a case study of twenty-four communities in rural United

States, African-Americans and poor people seem to have limited access to power positions

in community actions. 61 A 1994 profile of leadership in rural Manitoba shows that women

are under-represented in community leadership, particularly as elected officials in formal

organizations. In larger communities, women had more representatives among informal

community leaders, but size of community made no difference to their representation in

formal organizations. 62

Another important factor is the length of time that leaders have resided in the community.

Although it is possible for newcomers to become involved in community affairs,

it is more likely that long-term residents will be in positions of leadership. 63 This, of

course, runs counter to the evidence (discussed above) that a more diversified network

of people, including those in leadership, will contribute greatly to community vitality.

Taking into account the characteristics and challenges of rural community leadership,

researchers have noted three basic types of leaders. 64 The first is the transactional leader,

or the leader as manager. Through a contractual relationship, the transactional leader provides

day-to-day management of local community infrastructure. Since this type follows

more functional ideals, however, he/she tends to look only at such things as short-term

goals/profits, and cost-benefit analysis. As a result, the transactional leader is not helpful

for building long-term community cohesiveness.

The second type is the transformational leader, of whom Burns says: “Such leadership

occurs when one or more persons engage with others in such a way that leaders and followers

raise one another to higher levels of motivation and morality.” 65 The relationship

between transformational leaders and their followers is voluntary, based on common

goals. The issue here is that the concern is often for a specific organization, such as the

local co-operative, rather than the whole community. It may follow from this that an

action, good for the group or organization, may be undertaken to the detriment of the

larger community. Another problem with this type is that leadership development within

the group may be neglected. 66 U NIVERSITY OF S ASKATCHEWAN • 203


• A PPENDIX B

Hustedde’s third leadership type is the community-based leader. Unlike the transactional

or transformational models, the community-based leader looks at the interests of

the whole community. With the use of this model, therefore, there can be an exchange

of roles between followers and leaders, with followers playing a more active part. The

community-based model is a “consensual task, a sharing of ideas and a sharing of responsibilities,

where a leader is a leader for the moment only.” 67 There are, of course, disadvantages

to this approach. One is that with a focus on the whole community, the status quo

may be maintained. Others argue that this approach is “naive and ineffective” and will

not deal with special-interest groups, power issues, or self-centred individuals.

In reality, communities make use of all three types of leadership. It should be remembered

that the models are just that—models. Israel and Beaulieu have found that

what they refer to as the generalized leaders have the most significant effect on successful

local community development. 68 This point has also been emphasized by researchers

such as Choy and Rounds, and Hawker, who based their work on that of Johannison. 69

According to a taxonomy developed by Johannison, the community entrepreneur (leader)

“seeks projects which can reduce socioeconomic risks being imposed on the community

[and] considers the development of the community as a main personal goal.” 70 This contrasts

with the autonomous entrepreneur, who “seeks situations where hazardous activities

can be organized as independent projects [and] considers the community as a means for

attaining personal goals.” 71

Through case study analysis, Young and Charland have also shown the importance of

the generalized or community-based leader. 72 Included in a list of similarities among the

different success stories they examined were leaders who acted as a sparkplug, mobilizing

the community behind different initiatives, and in some cases passing the leadership role

on to others to carry on the necessary work. 73

Another aspect of leadership has been studied more closely during the last twenty

years and deserves some attention here. As more women have taken up leadership roles in

our society, researchers have begun to note the differences in leadership and participation

styles between men and women. This is an important point, since one component in the

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development of social capital is increased diversity of opinion within a community.

Through case study analysis of the Women for the Survival of Agriculture (WSA), Pearson

has shown two different models of women’s leadership. 74 The two types, which she refers

to as the connected procedural leader and the separatist procedural leader, are quite similar to

the leadership models discussed above. 75 Pearson’s theoretical model is based on research

regarding women’s empowerment and participation developed by Belenky et al. in their

work, Women’s Ways of Knowing. 76

The WSA began their organizational life with a connected procedural leader, Dotty

Harris, who was seen, among other things, as a skilful communicator, empathetic and

inclusive, and diplomatically assertive. Although Harris occasionally brought in “professionals,”

she always tried to involve as many members as possible and to delegate as much

authority as possible within the local regions and communities.

The subsequent leader, Dede Morris, was a good example of a separatist procedural

leader. Her style was adversarial, and emphasized the development of a formal structure.

Morris relied on professionals, procedures, and logical argument to sway the organization

to what she saw as the best solution. Despite the fact that the formalization of the organization

may have been inevitable, a significant number of women were disempowered by

the resulting leadership. It was found that many who did not agree with Morris would

rather have left the organization than try to counter with similar types of arguments and

“toughmindness.” It was clear that this type of leadership did not transform, but rather,

silenced. Based on this example, it is clear that women can bring to leadership a style that

is inclusive and consentual. This is not automatic, however. Without a conscious effort to

do otherwise, women leaders and their organizations may also slide towards more adversarial

models.

Many works deal with practical aspects of leadership development and recruitment

strategies. For example, the Canadian Agriculture Lifetime Leadership (CALL) Program,

recently initiated by the Canadian Farm Business Management Council, is using the

Leadership Practices Inventory (LPI) as part of their leadership development program. 77

Another recent example is the leadership development program available through Women

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• A PPENDIX B

and Rural Economic Development (WRED). 78 Other examples include Restructuring Rural

Communities Part 2: Grazing the Ideas, Approaches, and Resources of Selected Countries, by

H. Baker; and Developing Community Leadership: The Excel Approach, 1992, from the

Missouri Rural Innovation Institute. 79

Endnotes

1. B.N. Arnason, “Co-operatives in Saskatchewan,” in The New Opportunity for Co-operation (Saskatoon:

University of Saskatchewan, 1941.)

2. US Department of Agriculture, Cooperatives and Rural Development: A Report to Congress (Washington:

Agricultural Cooperative Service, US Department of Agriculture, 1989), p3.

3. L. Brown, “Organizations for the 21st Century?: Co-operatives and ‘New’ Forms of Organization,”

Canadian Journal of Sociology 22, no. 1 (1997): 65–93; B. Fairbairn, “Constructing an Alternative

Language for Co-operative Growth: An Ecological Metaphor,” Coopératives et Développement 27

(1995–96) nos. 1&2; B. Fairbairn, “Principles of Organizational Restructuring in Rural Organizations:

Co-operatives,” in Changing Rural Institutions, ed. R. Rounds (Brandon: Canadian Rural Restructuring

Foundation & Rural Development Institute, 1997); and L. Hammond Ketilson et al., Climate for Cooperative

Community Development (Saskatoon: Centre for the Study of Co-operatives, 1992).

4. Brown, p77.

5. Hammond Ketilson et al., p29.

6. Ibid., p31.

7. Co-operative Enterprise Development Team, Co-operative Enterprise Development in Canada: An

Action Plan, Report to the CCA/CCC/Co-operatives Secretariat Steering Group (Ottawa: Co-operatives

Secretariat, 1993). Included in this document are a series of case studies of co-operative development

from across Canada.

8. See chiefly, M.E. Fulton and L. Hammond Ketilson, “The Role of Cooperatives in Communities:

Examples from Saskatchewan,” Journal of Agricultural Cooperation 7 (1992): 15–42; B. Fairbairn et al.,

Co-operatives & Community Development: Economics in Social Perspective (Saskatoon: Centre for the

Study of Co-operatives, 1991); and M.E. Fulton and D. Laycock, “Introduction,” in Co-operative

Organizations and Canadian Society, ed. M.E. Fulton (Toronto: University of Toronto Press, 1990).

9. T. Webb, “Separating the Social and Economic Roles of Co-operatives: Dangerous Misconceptions,”

in Co-operative Values in a Changing World: CASC 1993 Yearbook, eds. D.W. Attwood and J. Hanley

(Saskatoon: Centre for the Study of Co-operatives, 1993), pp17–144.